Does loss in Schedule k-1 form 1065 from LLC deductible in Federal tax return?

Were the fees and miscellaneous expenses incurred for a rental property?

Your accountant is correct with regard to the 2% floor but that does not apply to property held for business use (such as rental real estate).

You should contact your accountant to confirm what you were told.

Thanks for your reply. My schedule k-1 is not real estate related. It is an investment fund which hold pre IPO company stock. It charges fees for managing the fund each year, but no capital gain (loss) until the company goes to IPO or being sold. Are this type expense occurred each year deductible at all? In schedule k-1, the letter under "descriptive information" is "W". 

Speak with your accountant to confirm but, generally, investment-related expenses are no longer deductible (as miscellaneous expenses) after tax reform (the TCJA).

Thanks again for your reply. My accountant have already told me that this type of expense is no longer deductible. I somehow thought it does not make sense. The fund charges 2% each year, if after two years I realized 5% gain, I actually lose money, because 5% gain - 4% management fee = 1%. I actually gained 1% (less expense), yet, I have to pay tax on 5% gain, not 1% since the expense are not deductible. So after tax, I could end up lose money with such investment in this example. 

It is even worse than your hypothetical if the fund actually loses money. If the price of the fund decreases, your account value also decreases but you still have to pay the 2% fee on that lower value, leaving you with even less.

You are absolutely right. When I invest, I had simply mind that any cost or loss can be deducted. Since the fund investment started in 2021, I have just learned such new tax rule when recently filing the 2021 tax return.