The Wall Street Journal-20080117-Investment-Advice Fee Ruling
Return to: The_Wall_Street_Journal-20080117
Investment-Advice Fee Ruling
WASHINGTON -- The U.S. Supreme Court yesterday unanimously ruled that investment-advice fees incurred by trusts and estates are subject to routine limits if claimed on federal tax returns.
The opinion, written by Chief Justice John Roberts, affirms a lower court ruling that denied a full deduction to more than $20,000 in investment-advice fees spent by a trust set up in 1967 under the will of Henry A. Rudkin, who, with his wife, founded food company Pepperidge Farm.
Chief Justice Roberts, in the opinion, said in most instances trust or estate investment fees must exceed 2% of adjusted gross income to be deductible. The opinion said investment fees may be fully deductible in some instances, such as when additional fees are incurred for fiduciary obligations.
Individuals filing annual income-tax returns with the Internal Revenue Service are subject to the same restriction.
The ruling, which sought to reconcile varying holdings in the federal appeals courts, affirmed an opinion by the Second U.S. Circuit Court of Appeals in New York.
(Knight vs. IRS)
