As previously reported, the IRS has published final regulations on the expenses of estates and trusts that are subject to the 2% floor for miscellaneous itemized deductions. T.D. 9664, 79 F.R. 26616 (5/9/2014)
These final regulations require estates and trusts that pay a single “bundled fee” must allocate that fee between expenses that are subject to the 2% floor and expenses that are not. Treas. Reg. § 1.67-4(c). These final regulations are applicable to fiscal years beginning on or after May 9, 2014, and so would apply to most existing estates and trusts beginning January 1, 2015, but would apply to new estates and trusts immediately.
In response to comments, and in order to give fiduciaries more time to “unbundle” their fees, the IRS has amended the final regulations to apply only to taxable years beginning after December 31, 2014.