Discussion:Allocation of AMT adjustment in trust's final year
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Discussion Forum Index --> Advanced Tax Questions --> Allocation of AMT adjustment in trust's final year
Discussion Forum Index --> Tax Questions --> Allocation of AMT adjustment in trust's final year
| 6 April 2009 | |
| The trust is final in 2008. The ordinary income is allocated to the income beneficiary. The pecuniary gain on funding is allocated to the residual trust.
Lacerte is allocating the whole AMT adjustment to the income beneficiary. Is there any basis to allocate some of the AMT adjustment to the entity receiving the allocation of capital gain? I cannot find any guidance. Thank you for any help. | |
| 6 April 2009 | |
| I believe that the AMT adjustment must be allocated to the residual trust. See Sec. 59(c). | |
| 6 April 2009 | |
| Riley, thank you for your response. I will work from 59(c). It makes a huge difference. Thank you! | |
| 6 April 2009 | |
| I've given this additional thought and done some reading and am posting this in case it is helpful to anyone else:
The AMT adjustment is the investment advisory fees. They don't qualify as fully deductible under Notice 2008-116. The fees reduce the allocation of ordinary income to the income beneficiary. I don't think that there is a basis to treat them differently for AMT. In other words, I think that the AMT adjustment must be allocated to the beneficiary who received the benefit of the deduction in the allocation of ordinary income. | |
