Feb. 27, 2008 -- As we were going to press with the March 2008 issue ofTrusts & Estates magazine, we received an email from Kevin Matz of White & Case, LLP, who has a piece in that issue entitled "Knight's Decided. Now What?" 

Matz wrote: "The great thing about law is that it never stays the same. Internal Revenue Service Notice 2008-32, issued today, provides interim guidance on the 2 percent floor limitations for trusts and estates relating to bundled investment management and advisory costs. 

"Importantly, the notice confirms that the forthcoming final regulations will only apply prospectively. In contrast, for 2007 and prior returns, taxpayers may continue to deduct the full amount of the bundled fiduciary fee without regard to the 2 percent floor -- so at least we now have guidance for this April 15th. 

"The notice requests comments by May 27, 2008, including suggestions for possible safe harbors and reasonable allocation methods with respect to costs that are subject to the 2 percent floor, and costs that are not subject to the 2 percent floor. 

"Comments may be submitted to the IRS electronically at Notice.Comments@irscounsel.treas.gov, noting Notice 2008-32 in the subject line." 

Kevin's March 2008 article discusses a variety of practical matters that need to be worked out in the wake of the U.S. Supreme Court's Jan. 16, 2008 decision in Knight v. Commissioner, No. 06-1286.