RobertB4444
Expert Alumni

Get your taxes done using TurboTax

Weirdly, they are both.

 

In order to pay these expenses you had to have a portion of your investment sold.  Since the fees that you paid are no longer deductible you sell these investments and then either make a profit or a loss on the sale.  The IRS charges tax on that sale and then you use the money to pay your fees.  

 

If the expenses were allowed to be deducted on your tax return then this would be a zero sum transaction.  But since they are not you have to pay taxes on it.

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