Deduct annual broker fees?
March 10, 2010 6:45 PM   Subscribe

taxfilter: Can I deduct the annual fees for my managed broker account (non-IRA)? I think this is OK, but Google is just making my eyes cross...
posted by smelvis to Work & Money (3 answers total)
 
I haven't heard of this. You can add the trade commission from a stock sale/purchase to the cost basis when calculating capital gains, but (to my knowledge) annual fees are not a deductible expense. Which IRS document are you looking at to find this?
posted by 0xFCAF at 7:05 PM on March 10, 2010


Best answer: IANATP, etc... Assuming that you itemize, you might be able to deduct certain investment expenses according to Publication 550, subject to the standard 2% rule for miscellaneous itemized deductions.

As 0xFCAF states, "You cannot deduct any broker's fees, commissions, or option premiums you pay (or that were netted out) in connection with the sale of investment property. They can be used only to figure gain or loss from the sale. See Reporting Capital Gains and Losses, in chapter 4, for more information about the treatment of these sale expenses."

However, "You can deduct fees you pay for counsel and advice about investments that produce taxable income. This includes amounts you pay for investment advisory services." It looks like you can probably deduct annual fees, but not commissions.
posted by zachlipton at 9:07 PM on March 10, 2010


zachlipton's Publication 550 link is pretty helpful. It probably depends if this is a fee for just having the account (similar to a credit card annual fee) or if this fee is for the management of the account in the context of providing advice and counsel. It's unclear to me what exactly "managed broker account" means in this context, so it'd be useful to clarify that.
posted by 0xFCAF at 9:43 PM on March 10, 2010


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