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​(March 29, 2019)  The Department of Revenue (DOR) has revised the Form 741 Kentucky Fiduciary Income Tax Return Instructions to clarify that the following expenses are not deductible on the estate or trust return.

  • Real estate, local, and property taxes deducted on federal Form 1041
  • Investment interest deducted on federal Form 1041
  • Fiduciary fees deducted on federal Form 1041 other than those described in IRC §67(e)
  • Attorney, accountant, and preparer fees deducted on federal Form 1041 other than those described in IRC §67(e)
  • Qualified Business Income (QBI) deduction listed on federal Form 1041

DOR has also issued a Technical Advice Memorandum, KY-TAM-19-01, to provide more information on the deductions that are still allowable as described in IRC §67(e).

For additional information regarding this and other DOR policies, please visit our Tax Professionals page.

The Kentucky Department of Revenue conducts work
under the authority of the Finance and Administration Cabinet.