Iowa Bill Allows Expense Deductions on Fiduciary Income Tax Returns.

The Iowa legislature unanimously passed HF 661 which allows a deduction on the Iowa Form 1041 for administrative expenses that were not taken or allowed as a deduction in calculating net income for federal fiduciary income tax purposes.  Thus, deductions taken on the Federal Form 706 can be claimed on the Iowa 1041 (Iowa has no estate tax).  The bill also allows administrative expenses to be deducted that would otherwise be disallowed for exceeding the 2 percent of adjusted gross income floor.  The effective date of the Bill is for tax years ending on or after July 1, 2015.