124 T.C. No. 19
UNITED STATES TAX COURT
WILLIAM L. RUDKIN TESTAMENTARY TRUST U/W/O HENRY A. RUDKIN,
MICHAEL J. KNIGHT, TRUSTEE, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 3297-04. Filed June 27, 2005.
T is a trust established in 1967. The trustee
engaged an outside firm to provide investment
management advice for T, and the firm was paid
$22,241.31 for such services during the 2000 taxable
year. On its Federal income tax return, T deducted
these fees (rounded) in full.
Held: The investment advisory fees paid by T are
not fully deductible under the exception provided in
sec. 67(e)(1), I.R.C., and are deductible only to the
extent that they exceed 2 percent of the T’s adjusted
gross income pursuant to sec. 67(a), I.R.C.
Michael J. Knight (specially recognized), for petitioner.
Frank W. Louis, for respondent.
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