Proposed regulations clarify estate and non-grantor trust deductions. The IRS has issued proposed reliance regs clarifying that certain deductions allowed to an estate or non-grantor trust wouldn’t be miscellaneous itemized deductions. Thus, these deductions would not be affected by the suspension of the deductibility of miscellaneous itemized deductions for tax years beginning before 2026. The proposed regs also provide guidance on determining the character, amount and allocation of deductions in excess of gross income succeeded to by a beneficiary on the termination of an estate or non-grantor trust.
