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aggravated6
New Member

Are Advisory Fee tax-deductible

Not clear to me. If fee is deducted in fee column tota/ gain/loss column seems I can deduct this fee?

1 Best answer

Accepted Solutions
Critter
Level 15

Are Advisory Fee tax-deductible

Investment management expenses are a miscellaneous deduction on Schedule A (Itemized Deductions) subject to 2% of your adjusted gross income.  

Select the "federal" tab, then "deductions & credits."  Then select "find deductions myself" then "other deductions & credits" then "other deductible expenses."  Say yes to the "other less common expenses" screen then you'll finally see a screen saying "enter other less common expenses."  Enter your portfolio management fees here. 

In order to get a tax benefit from this, you need to have more than 2% of your adjusted gross income in miscellaneous itemized deductions, plus you need to itemize your deductions on Schedule A.  If you owe Alternative Minimum Tax, these miscellaneous deductions are not deductible.

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4 Replies
Critter
Level 15

Are Advisory Fee tax-deductible

Investment management expenses are a miscellaneous deduction on Schedule A (Itemized Deductions) subject to 2% of your adjusted gross income.  

Select the "federal" tab, then "deductions & credits."  Then select "find deductions myself" then "other deductions & credits" then "other deductible expenses."  Say yes to the "other less common expenses" screen then you'll finally see a screen saying "enter other less common expenses."  Enter your portfolio management fees here. 

In order to get a tax benefit from this, you need to have more than 2% of your adjusted gross income in miscellaneous itemized deductions, plus you need to itemize your deductions on Schedule A.  If you owe Alternative Minimum Tax, these miscellaneous deductions are not deductible.

rjs
Level 15
Level 15

Are Advisory Fee tax-deductible

The answer above from Critter#2 applies to 2017. For 2018 through 2025 the new tax law eliminates all miscellaneous itemized deductions subject to the 2% of AGI limitation, including investment management or advisory fees.
jperez20
New Member

Are Advisory Fee tax-deductible

IRS publication https://www.irs.gov/newsroom/questions-and-answers-on-the-net-investment-income-tax seems to suggest that you can still take the deduction for the Net Investment Income Tax. Turbotax does not seem to carry the expense over to the NII calculations.

DMarkM1
Expert Alumni

Are Advisory Fee tax-deductible

The investment advisory fees deduction for the Net Investment Income tax have also been suspended for tax years 2018-25.  See this link for discussion and more information.  Also, here are the instructions for form 8960 (see pages 17-18).  

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