Question

How must bundled fees charged by a coporate trustee to the trust be treated? (1) bundled fees are fully deductible in computing trust adjusted gross income (2) bundled fees are only deductible as itemized deductions subject to the 2% of adjusted gross income limitation (3) bundled fees are to be allocated between expenses allowed in computingan adjusted fross income and those not so allowed by use of a reasonable method (4) bundled fees may not be allocated by looking at the percentage of the fudiciary's time devoted to investment advice as opposed to that dealing with beneficiaries or other trust matters

Answer 1

Option Correct

(3) bundled fees are to be allocated between expenses allowed in computingan adjusted gross income and those not so allowed by use of a reasonable method

As per the fnal regulation of by IRS the bundles fees are the fees which is billed together whereun a part is fully deductible,and other is subject to 2% floor. So these amount if are not able to be traceable/seprable than reasobanble method is used.

If any doubt please comment