The Ongoing Sec. 67(e) Controversy and the New Preparer Penalties
This item discusses how the 2% floor affects a trust’s regular tax and alternative minimum tax (AMT), the effect of the recent Supreme Court decision in Knight on the continuing controversy, and the efficacy of the proposed regulations in the wake of the Knight decision.
Published on May 21, 2010
How Will Final Regs. Apply the Knight Commonly Incurred Test
In Knight, the Supreme Court held that under Sec. 67(e), a trust expense otherwise subject to the 2% of AGI floor is fully deductible under the exception in Sec. 67(e) only if it would be uncommon for an individual holding the same property to incur the expenses.
Published on May 10, 2010
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