KNIGHT, trustee of WILLIAM L. RUDKIN TES- TAMENTARY TRUST v. COMMISSIONER OF INTERNAL REVENUE

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Syllabus
KNIGHT, trustee of WILLIAM L. RUDKIN TES-
TAMENTARY TRUST v. COMMISSIONER
OF INTERNAL REVENUE
certiorari to the united states court of appeals for
the second circuit
No. 06–1286. Argued November 27, 2007—Decided January 16, 2008
Individuals may subtract from their adjusted gross income certain item
ized deductions, 26 U. S. C. § 63(d), but only to the extent the deductions
exceed 2% of adjusted gross income, § 67(a). A trust may also take
such deductions subject to the 2% floor, § 67(e), except that when the
relevant cost is “paid or incurred in connection with the administration
of the . . . trust” and “would not have been incurred if the property
were not held in such trust,” the cost may be deducted without regard
to the floor, § 67(e)(1). After petitioner Knight (Trustee), the trustee of
a testamentary trust (Trust), hired the Warfield firm to advise as to
Trust investments, the Trust deducted in full on its fiduciary income
tax return the investment advisory fees paid to Warfield. Respondent
Commissioner found the fees subject to the 2% floor and therefore al
lowed the deduction only to the extent the fees exceeded 2% of the
Trust’s adjusted gross income. The Tax Court decided for the Commis
sioner, and the Second Circuit affirmed, holding that because such fees
were costs of a type that could be incurred if the property were held
individually rather than in trust, their deduction by the Trust was sub
ject to the 2% floor.
Held: Investment advisory fees generally are subject to the 2% floor when
incurred by a trust. Pp. 187–195.
(a) In asking whether a particular type of cost incurred by a trust
“would not have been incurred” if the property were held by an individ
ual, § 67(e)(1) excepts from the 2% floor only those costs that it would
be uncommon (or unusual, or unlikely) for such a hypothetical individual
to incur. The question whether a trust-related expense is fully deduct
ible turns on a prediction about what would happen if a fact were
changed—specifically, if the property were held by an individual rather
than by a trust. Predictions are based on what would customarily or
commonly occur. Thus, in the context of making such a prediction,
when there is uncertainty about the answer, the word “would” is best
read to express concepts such as custom, habit, natural disposition, or
probability. Although the statutory text does not expressly ask
whether expenses are “customarily” incurred outside of trusts, that is

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182 KNIGHT v. COMMISSIONER
Syllabus
the direct import of the language in context. The Second Circuit’s ap
proach, which asks whether the cost at issue could have been incurred
by an individual, flies in the face of the statutory language. Had Con
gress intended the Court of Appeals’ reading, it easily could have re
placed “would” with “could” in § 67(e)(1), and presumably would have.
The Trustee’s argument that the proper inquiry is whether a particular
expense of a particular trust was caused by the fact that the property
was held in trust fails because the statute by its terms does not establish
a straightforward causation test, but instead looks to the counterfactual
question whether an individual would have incurred such costs in the
absence of a trust. Further, under the Trustee’s approach, every
trust-related expense would be fully deductible, thus allowing the
exception to the 2% floor in § 67(e)(1) to swallow the general rule.
Pp. 187–192.
(b) The Trust’s investment advisory fees are subject to the 2% floor.
The Trustee—who has the burden of establishing entitlement to the
deduction, see, e. g., INDOPCO, Inc. v. Commissioner, 503 U. S. 79, 84—
has not demonstrated that it is uncommon or unusual for individuals to
hire an investment adviser. His argument is that individuals cannot
incur trust investment advisory fees, not that individuals do not com
monly incur investment advisory fees. Indeed, his essential point is
that he engaged an investment adviser because of his fiduciary duties
under Connecticut law, which requires a trustee to invest and manage
trust assets “as a prudent investor would.” This prudent investor
standard plainly does not refer to a prudent trustee, but looks instead
to what a prudent investor with the same investment objectives han
dling his own affairs would do—i. e., a prudent individual investor. Be
cause a hypothetical prudent investor in petitioner’s position would rea
sonably have solicited investment advice, it is quite difficult to say that
the investment advisory fees “would not have been incurred”—i. e., that
it would be unusual or uncommon for such fees to have been incurred—
if the property were held by an individual investor with the same objec
tives as the Trust in handling his own affairs. While Congress’s deci
sion to phrase the pertinent inquiry in terms of a prediction about a
hypothetical situation inevitably entails some uncertainty, that is no ex
cuse for judicial amendment of the statute. The Code elsewhere poses
similar questions, see, e. g., §§ 162(a), 212, and the inquiry is in any event
what § 67(e)(1) requires. Although some trust-related investment advi
sory fees may be fully deductible if an investment adviser were to im
pose a special, additional charge applicable only to its fiduciary accounts,
there is nothing in the record to suggest that Warfield did so, or treated
the Trust any differently than it would have treated an individual with
similar objectives, because of the Trustee’s fiduciary obligations. Nor

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does the Trust assert that its investment objectives or balancing of com
peting interests were so distinctive that any comparison with those of
an individual investor would be improper. Pp. 192–195.
467 F. 3d 149, affirmed.
Roberts, C. J., delivered the opinion for a unanimous Court.
Peter J. Rubin argued the cause for petitioner. With him
on the briefs were Cornelia T. L. Pillard, Walter Dellinger,
Carol A. Cantrell, Michael D. Martin, and Jonathan S.
Massey.
Eric D. Miller argued the cause for respondent. With
him on the brief were Solicitor General Clement, Acting
Assistant Attorney General Morrison, Deputy Solicitor
General Hungar, Acting Deputy Assistant Attorney Gen
eral Rothenberg, Anthony T. Sheehan, and Donald L. Korb.*
Chief Justice Roberts delivered the opinion of the
Court.
Under the Internal Revenue Code, individuals may sub
tract from their adjusted gross income certain itemized de
ductions, but only to the extent the deductions exceed 2% of
adjusted gross income. A trust may also claim those deduc
tions, also subject to the 2% floor, except that costs incurred
in the administration of the trust, which would not have been
incurred if the trust property were not held by a trust, may
be deducted without regard to the floor. In the case of indi
viduals, investment advisory fees are subject to the 2% floor;
the question presented is whether such fees are also subject
to the floor when incurred by a trust. We hold that they
generally are and therefore affirm the judgment below, albeit
for different reasons than those given by the Court of
Appeals.
*Briefs of amici curiae were filed for the American Bankers Association
et al. by Gregory F. Taylor and Lisa Bleier; and for the Tax Section of The
Florida Bar by Angela C. Vigil, Jonathan Blattmachr, and David Pratt.

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I
The Internal Revenue Code imposes a tax on the “taxable
income” of both individuals and trusts. 26 U. S. C. § 1(a).
The Code instructs that the calculation of taxable income
begins with a determination of “gross income,” capaciously
defined as “all income from whatever source derived.”
§ 61(a). “Adjusted gross income” is then calculated by sub
tracting from gross income certain “above-the-line” deduc
tions, such as trade and business expenses and losses from
the sale or exchange of property. § 62(a). Finally, taxable
income is calculated by subtracting from adjusted gross in
come “itemized deductions”—also known as “below-the-line”
deductions—defined as all allowable deductions other than
the “above-the-line” deductions identified in § 62(a) and the
deduction for personal exemptions allowed under § 151 (2000
ed. and Supp. V). § 63(d) (2000 ed.).
Before the passage of the Tax Reform Act of 1986, 100
Stat. 2085, below-the-line deductions were deductible in full.
This system resulted in significant complexity and potential
for abuse, requiring “extensive [taxpayer] recordkeeping
with regard to what commonly are small expenditures,” as
well as “significant administrative and enforcement problems
for the Internal Revenue Service.” H. R. Rep. No. 99–426,
p. 109 (1985).
In response, Congress enacted what is known as the “2%
floor” by adding § 67 to the Code. Section 67(a) provides
that “the miscellaneous itemized deductions for any taxable
year shall be allowed only to the extent that the aggregate of
such deductions exceeds 2 percent of adjusted gross income.”
The term “miscellaneous itemized deductions” is defined to
include all itemized deductions other than certain ones speci
fied in § 67(b). Investment advisory fees are deductible pur
suant to 26 U. S. C. § 212. Because § 212 is not listed in
§ 67(b) as one of the categories of expenses that may be de
ducted in full, such fees are “miscellaneous itemized deduc

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tions” subject to the 2% floor. 26 CFR § 1.67–1T(a)(1)(ii)
(2007).
Section 67(e) makes the 2% floor generally applicable not
only to individuals but also to estates and trusts,1 with one
exception relevant here. Under this exception, “the ad
justed gross income of an estate or trust shall be computed
in the same manner as in the case of an individual, except
that . . . the deductions for costs which are paid or incurred
in connection with the administration of the estate or trust
and which would not have been incurred if the property were
not held in such trust or estate . . . shall be treated as allow
able” and not subject to the 2% floor. § 67(e)(1).
Petitioner Michael J. Knight is the trustee of the William
L. Rudkin Testamentary Trust, established in the State of
Connecticut in 1967. In 2000, the Trustee hired Warfield
Associates, Inc., to provide advice with respect to investing
the Trust’s assets. At the beginning of the tax year, the
Trust held approximately $2.9 million in marketable securi
ties, and it paid Warfield $22,241 in investment advisory fees
for the year. On its fiduciary income tax return for 2000,
the Trust reported total income of $624,816, and it deducted
in full the investment advisory fees paid to Warfield. After
conducting an audit, respondent Commissioner of Internal
Revenue found that these investment advisory fees were
miscellaneous itemized deductions subject to the 2% floor.
The Commissioner therefore allowed the Trust to deduct the
investment advisory fees, which were the only claimed de
ductions subject to the floor, only to the extent that they
exceeded 2% of the Trust’s adjusted gross income. The dis
crepancy resulted in a tax deficiency of $4,448.
The Trust filed a petition in the United States Tax Court
seeking review of the assessed deficiency. It argued that
the Trustee’s fiduciary duty to act as a “prudent investor”
1 Because this case is only about trusts, we generally refer to trusts
throughout, but the analysis applies equally to estates.

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under the Connecticut Uniform Prudent Investor Act, Conn.
Gen. Stat. §§ 45a–541a to 45a–541l (2007),2 required the
Trustee to obtain investment advisory services, and there
fore to pay investment advisory fees. The Trust argued
that such fees are accordingly unique to trusts and therefore
fully deductible under 26 U. S. C. § 67(e)(1). The Tax Court
rejected this argument, holding that § 67(e)(1) allows full de
ductibility only for expenses that are not commonly incurred
outside the trust setting. Because investment advisory fees
are commonly incurred by individuals, the Tax Court held
that they are subject to the 2% floor when incurred by a
trust. Rudkin Testamentary Trust v. Commissioner, 124
T. C. 304, 309–311 (2005).
The Trust appealed to the United States Court of Appeals
for the Second Circuit. The Court of Appeals concluded
that, in determining whether costs such as investment advi
sory fees are fully deductible or subject to the 2% floor,
§ 67(e) “directs the inquiry toward the counterfactual condi
tion of assets held individually instead of in trust,” and re
quires “an objective determination of whether the particular
cost is one that is peculiar to trusts and one that individuals
are incapable of incurring.” 467 F. 3d 149, 155, 156 (2006).
The court held that because investment advisory fees were
“costs of a type that could be incurred if the property were
held individually rather than in trust,” deduction of such fees
by the Trust was subject to the 2% floor. Id., at 155–156.
2 Forty-four States and the District of Columbia have adopted versions
of the Uniform Prudent Investor Act. See 7B U. L. A. 1–2 (2006) (listing
States that have enacted the Uniform Prudent Investor Act). Five of the
remaining six States have adopted their own versions of the prudent in
vestor standard. See Del. Code Ann., Tit. 12, § 3302 (1995 ed. and 2006
Supp.); Ga. Code Ann. § 53–12–287 (1997); La. Rev. Stat. Ann. § 9:2127
(West 2005); Md. Est. & Trusts Code Ann. § 15–114 (Lexis 2001); S. D.
Codified Laws § 55–5–6 (2004). Kentucky, the only remaining State, ap
plies the prudent investor standard only in certain circumstances. See
Ky. Rev. Stat. Ann. § 286.3–277 (Lexis 2007 Cum. Supp.); §§ 386.454(1),
386.502 (Supp. 2007).

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The Courts of Appeals are divided on the question pre
sented. The Sixth Circuit has held that investment advisory
fees are fully deductible. O’Neill v. Commissioner, 994
F. 2d 302, 304 (1993). In contrast, both the Fourth and Fed
eral Circuits have held that such fees are subject to the 2%
floor, because they are “commonly” or “customarily” incurred
outside of trusts. See Scott v. United States, 328 F. 3d 132,
140 (CA4 2003); Mellon Bank, N. A. v. United States, 265
F. 3d 1275, 1281 (CA Fed. 2001). The Court of Appeals
below came to the same conclusion, but as noted announced
a more exacting test, allowing “full deduction only for those
costs that could not have been incurred by an individual
property owner.” 467 F. 3d, at 156 (emphasis added). We
granted the Trustee’s petition for certiorari to resolve the
conflict, 551 U. S. 1144 (2007), and now affirm.
II
“We start, as always, with the language of the statute.”
Williams v. Taylor, 529 U. S. 420, 431 (2000). Section 67(e)
sets forth a general rule: “[T]he adjusted gross income of
[a] . . . trust shall be computed in the same manner as in the
case of an individual.” That is, trusts can ordinarily deduct
costs subject to the same 2% floor that applies to individuals’
deductions. Section 67(e) provides for an exception to the
2% floor when two conditions are met. First, the relevant
cost must be “paid or incurred in connection with the admin
istration of the . . . trust.” § 67(e)(1). Second, the cost must
be one “which would not have been incurred if the property
were not held in such trust.” Ibid.
In applying the statute, the Court of Appeals below asked
whether the cost at issue could have been incurred by an
individual.3 This approach flies in the face of the statutory
3 The Solicitor General embraces this position in this Court, arguing that
the Court of Appeals’ approach represents the best reading of the statute
and establishes an easily administrable rule. See Brief for Respondent
17–20, 22. Indeed, after the Court of Appeals’ decision, the Commissioner

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language. The provision at issue asks whether the costs
“would not have been incurred if the property were not held”
in trust, ibid., not, as the Court of Appeals would have it,
whether the costs “could not have been incurred” in such a
case, 467 F. 3d, at 156. The fact that an individual could not
do something is one reason he would not, but not the only
possible reason. If Congress had intended the Court of Ap
peals’ reading, it easily could have replaced “would” in the
statute with “could,” and presumably would have. The fact
that it did not adopt this readily available and apparent alter
native strongly supports rejecting the Court of Appeals’
reading.4
Moreover, if the Court of Appeals’ reading were correct,
it is not clear why Congress would have included in the stat
adopted that court’s reading of the statute in a proposed regulation. See
Section 67 Limitations on Estates or Trusts, 72 Fed. Reg. 41245 (2007)
(notice of proposed rulemaking) (a trust-related cost is exempted from the
2% floor only if “an individual could not have incurred that cost in connec
tion with property not held in an estate or trust” (emphasis added)). The
Government did not advance this argument before the Court of Appeals.
See Brief for Appellee in No. 05–5151–AG (CA2), pp. 3–4, 22–24. In fact,
the notice of proposed rulemaking appears to be the first time the Govern
ment has ever taken this position, and we are the first Court to which the
argument has been made in a brief. See Brief for United States in Mellon
Bank, N. A. v. United States, No. 01–5015 (CA Fed.), p. 27 (“[I]f a trust
related administrative expense is also customarily or habitually incurred
outside of trusts, then it is subject to the two-percent floor”); Brief for
United States in Scott v. United States, No. 02–1464 (CA4), p. 27 (same).
4 In pressing the Court of Appeals’ approach, the Solicitor General ar
gues that “to say that a team would not have won the game if it were not
for the quarterback’s outstanding play is to say that the team could not
have won without the quarterback.” Brief for Respondent 19. But the
Solicitor General simply posits the truth of a proposition—that the team
would not have won the game if it were not for the quarterback’s outstand
ing play—and then states its equivalent. The statute, in contrast, does
not posit any proposition. Rather, it asks a question: whether a particular
cost would have been incurred if the property were held by an individual
instead of a trust.

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ute the first clause of § 67(e)(1). If the only costs that are
fully deductible are those that could not be incurred outside
the trust context—that is, that could only be incurred by
trusts—then there would be no reason to place the further
condition on full deductibility that the costs be “paid or in
curred in connection with the administration of the . . .
trust,” § 67(e)(1). We can think of no expense that could be
incurred exclusively by a trust but would nevertheless not
be “paid or incurred in connection with” its administration.
The Trustee argues that the exception in § 67(e)(1) “estab
lishes a straightforward causation test.” Brief for Peti
tioner 22. The proper inquiry, the Trustee contends, is
“whether a particular expense of a particular trust or estate
was caused by the fact that the property was held in the
trust or estate.” Ibid. Investment advisory fees incurred
by a trust, the argument goes, meet this test because these
costs are caused by the trustee’s obligation “to obtain advice
on investing trust assets in compliance with the Trustees’
particular fiduciary duties.” Ibid. We reject this reading
as well.
On the Trustee’s view, the statute operates only to distin
guish costs that are incurred by virtue of a trustee’s fiduciary
duties from those that are not. But all (or nearly all) of a
trust’s expenses are incurred because the trustee has a duty
to incur them; otherwise, there would be no reason for the
trust to incur the expense in the first place. See G.
Bogert & G. Bogert, Law of Trusts and Trustees § 801, p. 134
(2d rev. ed. 1981) (“[T]he payment for expenses must be rea
sonably necessary to facilitate administration of the trust”).
As an example of a type of trust-related expense that would
be subject to the 2% floor, the Trustee offers “expenses for
routine maintenance of real property” held by a trust. Brief
for Petitioner 23. But such costs would appear to be fully
deductible under the Trustee’s own reading because a
trustee is obligated to incur maintenance expenses in light
of the fiduciary duty to maintain trust property. See 1 Re

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statement (Second) of Trusts § 176, p. 381 (1957) (“The
trustee is under a duty to the beneficiary to use reasonable
care and skill to preserve the trust property”).
Indeed, the Trustee’s formulation of its argument is circu
lar: “Trust investment advice fees are caused by the fact
the property is held in trust.” Brief for Petitioner 19. But
“trust investment advice fees” are only aptly described as
such because the property is held in trust; the statute asks
whether such costs would be incurred by an individual if the
property were not. Even when there is a clearly analogous
category of costs that would be incurred by individuals, the
Trustee’s reading would exempt most or all trust costs as
fully deductible merely because they derive from a trustee’s
fiduciary duty. Adding the modifier “trust” to costs that
otherwise would be incurred by an individual surely cannot
be enough to escape the 2% floor.
What is more, if the Trustee’s position were correct, then
only the first clause of § 67(e)(1)—providing that the cost be
“incurred in connection with the administration of the . . .
trust”—would be necessary. The statute’s second, limiting
condition—that the cost also be one “which would not have
been incurred if the property were not held in such trust”—
would do no work; we see no difference in saying, on the one
hand, that costs are “caused by” the fact that the property
is held in trust and, on the other, that costs are incurred
“in connection with the administration” of the trust. Thus,
accepting the Trustee’s approach “would render part of the
statute entirely superfluous, something we are loath to do.”
Cooper Industries, Inc. v. Aviall Services, Inc., 543 U. S. 157,
166 (2004).
The Trustee’s reading is further undermined by our incli
nation, “[i]n construing provisions . . . in which a general
statement of policy is qualified by an exception, [to] read the
exception narrowly in order to preserve the primary opera
tion of the provision.” Commissioner v. Clark, 489 U. S.
726, 739 (1989). As we have said, § 67(e) sets forth a general

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rule for purposes of the 2% floor established in § 67(a): “For
purposes of this section, the adjusted gross income of an
estate or trust shall be computed in the same manner as
in the case of an individual.” Under the Trustee’s reading,
§ 67(e)(1)’s exception would swallow the general rule; most
(if not all) expenses incurred by a trust would be fully
deductible. “Given that Congress has enacted a general
rule . . . , we should not eviscerate that legislative judgment
through an expansive reading of a somewhat ambiguous ex
ception.” Ibid.
More to the point, the statute by its terms does not “estab
lis[h] a straightforward causation test,” Brief for Petitioner
22, but rather invites a hypothetical inquiry into the treat
ment of the property were it held outside a trust. The stat
ute does not ask whether a cost was incurred because the
property is held by a trust; it asks whether a particular cost
“would not have been incurred if the property were not held
in such trust,” § 67(e)(1). “Far from examining the nature
of the cost at issue from the perspective of whether it was
caused by the trustee’s duties, the statute instead looks to
the counterfactual question of whether individuals would
have incurred such costs in the absence of a trust.” Brief
for Respondent 9.
This brings us to the test adopted by the Fourth and Fed
eral Circuits: Costs incurred by trusts that escape the 2%
floor are those that would not “commonly” or “customarily”
be incurred by individuals. See Scott, 328 F. 3d, at 140 (“Put
simply, trust-related administrative expenses are subject to
the 2% floor if they constitute expenses commonly incurred
by individual taxpayers”); Mellon Bank, 265 F. 3d, at 1281
(§ 67(e) “treats as fully deductible only those trust-related
administrative expenses that are unique to the administra
tion of a trust and not customarily incurred outside of
trusts”). The Solicitor General also accepts this view as an
alternative reading of the statute. See Brief for Respond
ent 20–21. We agree with this approach.

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The question whether a trust-related expense is fully de
ductible turns on a prediction about what would happen if a
fact were changed—specifically, if the property were held by
an individual rather than by a trust. In the context of mak
ing such a prediction, when there is uncertainty about the
answer, the word “would” is best read as “express[ing] con
cepts such as custom, habit, natural disposition, or probabil
ity.” Scott, supra, at 139. See Webster’s Third New Inter
national Dictionary 2637–2638 (1993); American Heritage
Dictionary 2042, 2059 (3d ed. 1996). The Trustee objects
that the statutory text “does not ask whether expenses are
‘customarily’ incurred outside of trusts,” Reply Brief for
Petitioner 15, but that is the direct import of the language
in context. The text requires determining what would hap
pen if a fact were changed; such an exercise necessarily en
tails a prediction; and predictions are based on what would
customarily or commonly occur. Thus, in asking whether a
particular type of cost “would not have been incurred” if the
property were held by an individual, § 67(e)(1) excepts from
the 2% floor only those costs that it would be uncommon
(or unusual, or unlikely) for such a hypothetical individual
to incur.
III
Having decided on the proper reading of § 67(e)(1), we
come to the application of the statute to the particular ques
tion in this case: whether investment advisory fees incurred
by a trust escape the 2% floor.
It is not uncommon or unusual for individuals to hire an
investment adviser. Certainly the Trustee, who has the
burden of establishing its entitlement to the deduction, has
not demonstrated that it is. See INDOPCO, Inc. v. Com
missioner, 503 U. S. 79, 84 (1992) (noting the “ ‘familiar
rule’ that ‘an income tax deduction is a matter of legislative
grace and that the burden of clearly showing the right to the
claimed deduction is on the taxpayer’ ” (quoting Interstate
Transit Lines v. Commissioner, 319 U. S. 590, 593 (1943)));

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Tax Court Rule 142(a)(1) (stating that the “burden of proof
shall be upon the petitioner,” with certain exceptions not
relevant here). The Trustee’s argument is that individuals
cannot incur trust investment advisory fees, not that individ
uals do not commonly incur investment advisory fees.
Indeed, the essential point of the Trustee’s argument is
that he engaged an investment adviser because of his fidu
ciary duties under Connecticut’s Uniform Prudent Investor
Act, Conn. Gen. Stat. § 45a–541a(a) (2007). The Act epony
mously requires trustees to follow the “prudent investor
rule.” See n. 2, supra. To satisfy this standard, a trustee
must “invest and manage trust assets as a prudent investor
would, by considering the purposes, terms, distribution re
quirements and other circumstances of the trust.” § 45a–
541b(a) (emphasis added). The prudent investor standard
plainly does not refer to a prudent trustee; it would not be
very helpful to explain that a trustee should act as a prudent
trustee would. Rather, the standard looks to what a pru
dent investor with the same investment objectives handling
his own affairs would do—i. e., a prudent individual investor.
See Restatement (Third) of Trusts (Prudent Investor Rule)
Reporter’s Notes on § 227, p. 58 (1990) (“The prudent inves
tor rule of this Section has its origins in the dictum of Har
vard College v. Amory, 9 Pick. (26 Mass.) 446, 461 (1830),
stating that trustees must ‘observe how men of prudence,
discretion, and intelligence manage their own affairs, not in
regard to speculation, but in regard to the permanent dispo
sition of their funds, considering the probable income, as well
as the probable safety of the capital to be invested’ ”). See
also, e. g., In re Musser’s Estate, 341 Pa. 1, 9–10, 17 A. 2d
411, 415 (1941) (noting the “general rule” that “a trustee
must exercise such prudence and diligence in conducting the
affairs of the trust as men of average diligence and discretion
would employ in their own affairs”). And we have no reason
to doubt the Trustee’s claim that a hypothetical prudent in
vestor in his position would have solicited investment advice,

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just as he did. Having accepted all this, it is quite difficult
to say that investment advisory fees “would not have been
incurred”—that is, that it would be unusual or uncommon for
such fees to have been incurred—if the property were held
by an individual investor with the same objectives as the
Trust in handling his own affairs.
We appreciate that the inquiry into what is common may
not be as easy in other cases, particularly given the absence
of regulatory guidance. But once you depart in the name of
ease of administration from the language chosen by Con
gress, there is more than one way to skin the cat: The
Trustee raises administrability concerns in support of his
causation test, Reply Brief for Petitioner 6, but so does the
Government in explaining why it prefers the Court of Ap
peals’ approach to the one it has successfully advanced before
the Tax Court and two Federal Circuits. Congress’s deci
sion to phrase the pertinent inquiry in terms of a prediction
about a hypothetical situation inevitably entails some uncer
tainty, but that is no excuse for judicial amendment of the
statute. The Code elsewhere poses similar questions—such
as whether expenses are “ordinary,” see §§ 162(a), 212; see
also Deputy, Administratrix v. Du Pont, 308 U. S. 488, 495
(1940) (noting that “[o]rdinary has the connotation of normal,
usual, or customary”)—and the inquiry is in any event what
§ 67(e)(1) requires.
As the Solicitor General concedes, some trust-related in
vestment advisory fees may be fully deductible “if an invest
ment advisor were to impose a special, additional charge
applicable only to its fiduciary accounts.” Brief for Re
spondent 25. There is nothing in the record, however, to
suggest that Warfield charged the Trustee anything extra,
or treated the Trust any differently than it would have
treated an individual with similar objectives, because of the
Trustee’s fiduciary obligations. See App. 24–27. It is con
ceivable, moreover, that a trust may have an unusual invest
ment objective, or may require a specialized balancing of the

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195 Cite as: 552 U. S. 181 (2008)
Opinion of the Court
interests of various parties, such that a reasonable compari
son with individual investors would be improper. In such a
case, the incremental cost of expert advice beyond what
would normally be required for the ordinary taxpayer would
not be subject to the 2% floor. Here, however, the Trust
has not asserted that its investment objective or its requisite
balancing of competing interests was distinctive. Accord
ingly, we conclude that the investment advisory fees incurred
by the Trust are subject to the 2% floor.
The judgment of the Court of Appeals is affirmed.
It is so ordered.