Trustee Fees

[TAXMAN]

A mother died leaving all assets to a trust for severelly disabled child age 30+. Brother was named Trustee. He died. Sister was named by court to be trustee. She is disabled and does not work. She must make an accounting to the court for transactions in the trust. She is not allowed to invest assets(cd's) into anything but CD"S. The state of Virginia sets a fee to which she can take. Sometimes she takes a fee sometimes not. My question is: Is this fee subject to SE tax? I don't think so but may be second guessing myself. Any help or cite greatly appreciated. Thanks

[JohnH]

Based upon the facts you have presented, I don't think this rises to the level of a trade or business.

The sister is a nonprofessional trustee.

See Revenue Ruling 58-5, especially item a)( 2).

http://www.taxalmana.../Rev._Rul._58-5