Can I deduct investment expenses, such as the cost of my investment advisor, on my 2019 California Income Tax return?

[Double-A]

Excellent, informative thread - thank you. Two questions:
1) Exactly which types of investment expense are eligible for deduction from CA income taxes? Only investment advisory management fees, or also ADR management fees paid to the custodian (e.g. ADR mgmt fee for foreign stocks' "American Depository Receipts" that Schwab or Fidelity may charge as the account custodian)? What about trading fees? 
2) Are such investment expenses eligible for deduction on my CA tax return if they were incurred in qualified retirement plan accounts (e.g. any flavor of IRA)? Or does this deduction apply to investment expenses incurred ONLY in taxable brokerage accounts? 

Thank you!

[DaveF1006]

California investment fees that are currently deductible conformed with the federal investment fees deduction when these were deductible on the federal tax return. According to IRS publication 529, Investment fees, custodial fees, trust administration fees, and other expenses you paid for managing your investments that produce taxable income are miscellaneous itemized deductions and are no longer deductible but ARE deductible on your California state tax return.

In answer to your question, this includes custodial fees, trading fees, etc.  As far as management fees within a retirement account, this Turbo Tax post states Management fees paid from your IRA account have never been deductible on your federal tax return thus are not deductible on your California return. Separately-paid management fees however were deductible thus should be deductible on your California return. Separately-paid means you were billed and paid these fees separately rather than have them paid by your account.

[losalpal]

I have another question- in California, is it ALL investment advisor fees, or only fees related to investment accounts?

[DaveF1006]

 Yes, they are still deductible in California but not on a federal return. Enter your investment advisory fees and other investment expenses in the following manner.

1. federal>deduction and credits
2. Retirement and Investments>other investment expenses
3. They won't count for Federal taxes but Turbo Tax will populate these fees in your CA return.

@losalpal

[susankeefe65]

Hi - if I am paying my investment advisor for my taxable account directly (not via the account itself), is this still deductible from my CA return? I don't have a 1099 for it. 

And I cannot deduct my tax advisor fees for my retirement account correct? 

Thanks!

[MonikaK1]

Yes, the amounts you paid to produce or collect taxable income, and manage or protect property held for earning income, are still deductible for California. California doesn't follow the Federal law that  eliminated or restricted many itemized deductions for tax years 2018 through 2025.

Enter the fees in the Federal section of TurboTax. The information will flow through to your California return, Schedule CA. Answer the questions about any California differences in the California section. 

@susankeefe65