The Zhang Trust incurred the following items during the year. What is Zhang's deduction for the tax preparation fees?

Question

The Zhang Trust incurred the following items during the year.  What is Zhang's deduction for the tax preparation fees?

Quizplus · Accepted Answer

Tax preparation fees are deductible as a miscellaneous itemized deduction subject to a 2% adjusted gross income (AGI) floor. In this case, the total amount of miscellaneous itemized deductions is $200,000, and 2% of the Zhang Trust's AGI of $100,000 is $2,000. Thus, the maximum deduction for tax preparation fees is $4,000 ($200,000 - $2,000).

The Zhang Trust Incurred the Following Items During the Year