Deductable Investment expenses?

[chrzanowski]

Can you claim hidden investment expenses on mutual funds? Example: XYZ fund has an expense ratio of 0.66% which equals to $6.60 per $1000 of investment. If you had this mutual fund worth $1,000,000.00 this would equate to a yearly fee of $6,600.00. Since the brokerage doesn’t present you with a fee for this service can you still claim this as an investment expense?

[KenH1 · Accepted solution]

No, you cannot deduct expenses that are embedded within the investment performance, such as mutual fund expense ratios, 12b-1 fees. etc.

You can deduct things like retainer fees paid to investment professionals, investment literature, performance tracking software, etc.  See below for the TurboTax "how to:"

https://ttlc.intuit.com/replies/5765464

[arpegio]

It may be the case that one cannot deduct these expenses at the Federal Level but some States might allow it.  Turbo Tax says so in the actual section on investment expenses but provides no further information.  It would be good to know what States allow it.