![Trusts & Estates logo Trusts & Estates logo](https://eu-images.contentstack.com/v3/assets/bltabaa95ef14172c61/bltbd5defc64f6009ee/670cf9093dbe55752cb9da04/cf81ba8d-3b13-48d4-9e34-9fad6c8627d7.jpg?width=700&auto=webp&quality=80&disable=upscale)
Tax Law Update 2008-02-01 (1)Tax Law Update 2008-02-01 (1)
Supremes rule on Knight: A unanimous U.S. Supreme Court on Jan. 16, 2008, ruled that trust investment advisory fees (IAFs) are subject to the 2 percent floor, handing a defeat to banks and taxpayers who'd hoped all IAFs would be found to be fully deductible. In Knight, Trustee of William L. Rudkin Testamentary Trust v. Commissioner (U.S. Supreme Court, Jan. 16, 2008) (which is known both as the Knight
February 1, 2008
David A. Handler, partner in the Chicago office of Kirkland & Ellis LLP
Supremes rule on Knight:
A unanimous U.S. Supreme Court on Jan. 16, 2008, ruled that trust investment advisory fees (IAFs) are subject to the 2 percent floor, handing a defeat to banks and taxpayers who'd hoped all IAFs would be found to be fully deductible.
In Knight, Trustee of William L. Rudkin Testamentary Trust v. Commissioner (U.S. Supreme Court, Jan. 16, 2008) (which is known both as the Knight case and the Rudkin case), the question was whether IAFs incurred by a trust in managing its investments are subject to Internal Revenue Code Section 67(e)'s 2 percent floor. That section allows a trust to deduct certain expenses from taxable income — but only to the exten...
Unlock All Access Premium Subscription
Get Trusts & Estates articles, digital editions, and an optional print subscription. Choose your subscription now and dive into expert insights today!
Already Subscribed?