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Old 12-17-2007, 09:06 PM
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Join Date: Sep 2007
Posts: 15

Can trustee fee be spread out over years?

What is the name of your state? California

I am the trustee of my father's trust and I am to receive a trustee fee. To minimize taxes, can I take the fee over a number of years or, since I control the money, do I have to take it as a lump sum?

Thank you.
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Old 12-18-2007, 02:37 AM
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Join Date: Aug 2002
Location: Washington
Posts: 3,484
You can spread out the payments & related taxes as long as you are doing so for a legitimate, non-tax reason. For example, if the trustee work takes place over several years, it would be reasonable to take the trustee fee over several years. OTOH, if you do all the work in 3 weeks, spreading out the fee over 3 years would not be reasonable.

FYI, the trustee fee is reported on line 21 of the 1040 as 'Nonprofessional trustee fee' & is not subject to self-employment taxes unless you're in the business of being a trustee.
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