how to edit 8960 to include investment expenses - advisory fee?

[astrikovski]

8960 change

[jtax · Accepted solution]

TLDR: Individuals cannot deduct investment expenses. Estates and trusts might be able to  (and, I think, only if they exceed what an individual would ordinarily pay). 

Why? 

An investment expense is a miscellaneous itemized deduction because IRC 67(b) says so. https://www.law.cornell.edu/uscode/text/26/67 (or rather doesn't include it in the list of non-itemized deductions). Misc itemized deductions were not allowed for 2025 and are permanently disallowed from now on. IRC 67(h) or new 67(a). 

Form 8960 is about the Net Investment Income (NII) surcharge. It allows deductions that are "allowed by this subtitle" IRC 1411(c)(1)(B). https://www.law.cornell.edu/uscode/text/26/67 The regulations say this means  "deductions allowed by subtitle A that are properly allocable to such gross income or net gain (as determined in paragraph (f) of this section)." Treas. Reg. 1.1411-4(a)(2). https://www.law.cornell.edu/cfr/text/26/1.1411-4  Subtitle A is the income tax.

Therefore, investment expenses are itemized deduction and because itemized deductions are not allowed as a deduction for individuals, they are not deduction from the NII.