This answer is INCORRECT. I believe TurboTaxGregH did not bother to read beyond the first sentence of the question. Davette said the fee was being paid out of a pretax account. Therefore it is being paid with money that has never been taxed, and since it is being paid directly from the pretax account, it never will be taxed, and there is no justification for deducting it from taxable income. The net result is the same as if Davette took money out the pretax account to pay the fee (making the money subject to tax), and then deducted the fee from taxable income. I have consulted NUMEROUS tax experts on this point. In order for the investment advisory fees to be deductible, they MUST be paid out of a regular account (not a 401(k), IRA or similar). Whether the investment advisory fees are used to advise on pretax or post-tax accounts is immaterial.
