An accounting question that is probably relevant to many on this site. (I scrolled the titles to posts in this category for the last 4+ years and can’t find if it’s been addressed.)
I’m very new to all of this and last year when I succeeded as trustee to a discretionary family trust with mineral properties in Texas, I was lost. So I joined NARO (National Association of Royalty Owners) and attended their conventions in Texas and the national convention in Oklahoma City. I attended many seminars and learned enough to know what I’m doing in managing the trust. It was necessary.
Are the various expenses for NARO conventions deductible on the trust 1041 return? I have travel, hotel, membership fees, convention registration fees and several individual seminar registration fees.
And if they (hopefully) are deductible, should they be listed as trustee expenses or should I try to put them in their respective categories on Schedule E? Or does it matter? (I do not pay myself as trustee, because I’m a beneficiary also and I’m fine with sharing in the trust income with my family that way.)
These expenses that are paid by the trust, either directly or reimbursement to you, should be deductible, except as limited by Internal Revenue Code. In particular there is a limitation on travel meals. If the trust is not reimbursing you, then that could be an issue. It will mix in an account payable on trust books / balance sheet. How to deduct on your personal tax return will require review. Your CPA can best advise you on this. Be sure that the CPA bills separately for trust tax return and is paid by the trust.
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Thank you. Yes, the trust has been reimbursing me for all expenses, or it has paid the expense itself directly with its own debit card or check, both on the trust bank account.
I’m fairly comfortable with most expenses, it’s just the education expenses at NARO conventions I wasn’t sure of. Those expenses have been so necessary and helpful to the trust.
I’m aware of the limitations on meals (50%), but since there haven’t been many of those and I was not always alone, I’m not deducting any of those. And I’m not deducting anything on my personal tax return.
Yes, legitimate deduction on 1041 since directly related to management of trust assets.
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