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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16576
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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I am a trustee of an irrevocable income only trust which yields

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I am a trustee of an irrevocable income only trust which yields me interest and dividends. The irrevocable trust also includes real estate. Can I pay the real estate tax from the interest and dividends I receive on my 1040 and still deduct that amount on the trust's 1041 or must it be paid directly from the trust in order to do that. I want the deduction on the 1041 as much of its value is lost due to the AMT on my 1040.

MyVirtualCPA :

Hello! I am a CPA here to assist you with your tax questions. My goal is to provide you with excellent service today.

MyVirtualCPA :

You are a separate entity apart from your trust. You would need to pay the expenses out of the trust, to ensure that the expense is deductible.

MyVirtualCPA :

If you pay the expenses personally, you would put deductions on your personal return and you have mentioned that you don't want the deduction there.

MyVirtualCPA :

Therefore, you should pay this out of the trust.

MyVirtualCPA :

Do you have any questions?

Customer:

In order to pay it directly from the trust I would need to set up a checking account in the IIOT. Is that correct?

MyVirtualCPA :

Yes, that is correct

Megan C and 2 other Tax Specialists are ready to help you
Thanks, Jim for your positive rating. Please come back and visit MyVirtualCPA for any of your tax, finance, or social security needs. It was a pleasure working with you today.