Investment Expense Fees Capped

[TAXNJ]

Broker/Advisors fees depends on type

If I read the TAXBOOK correctly (maybe wrong) as it applies to these type of fees:

Broker/Advisors fees I think is added to,the basis of the investment.

IRA Broker/Advisors fees if paid separately (not within)from the IRA account may be deductible

Broker/Advisors fees To collect interest and/or dividends may be deductible

[FEDUKE404]

Investment interest vs expenses

When I enter the fees my client pays his broker for handling his investments (15K !), my software wants to create a 4952 even though these fees are not literally investment interest expense. Does anyone believe that, other than the 2% of AGI, that the deduction should be capped in any way by any of the investment income?

The only thing that goes on Form 4952 is investment interest. The deductibility of qualifying investment interest is limited to the amount entered on the form or the amount of qualifying investment income (you will need to look up the definition) actually received. Disallowed investment interest can be carried forward until used.

Fees "for handling his investments" always go to line 23 of Schedule A, and are limited to the 2% AGI floor for the amount that may be deducted.

These two investment costs are totally different in both concept and tax treatment.

FE

[taxriv]

When I enter the fees my client pays his broker for handling his investments (15K !), my software wants to create a 4952 even though these fees are not literally investment interest expense. Does anyone believe that, other than the 2% of AGI, that the deduction should be capped in any way by any of the investment income?