19.15 Checklist of Deductible Investment Expenses

The following investment expenses are deductible as miscellaneous expenses on Schedule A subject to the 2% adjusted gross income (AGI) floor.

  • Accounting fees for keeping records of investment income.
  • Bank deposit loss if not federally insured (18.5).
  • Casualty or theft losses of income-producing property such as stock certificates, but not rental or royalty property; the deduction is figured on Form 4684 (18.13) and entered on Schedule A.
  • Fees for collecting interest and dividends. Also deductible are fees paid to a bank that acts as dividend agent in an automatic dividend reinvestment plan of a publicly owned corporation. Costs of collecting tax-exempt interest are not deductible; expenses deducted on an estate tax return are also not deductible. Fees paid to a broker to acquire securities are not deductible but are added to the cost of the securities. Commissions and fees paid by an investor on the sale of securities reduce the selling price; a dealer, however, may deduct selling commissions as business expenses.
  • Fees to set up or administer an IRA. The fees must be billed and paid separately from the regular IRA contribution.
  • Guardian fees or fees of committee for a ward or minor incurred in producing or collecting income belonging to the ward or minor or in managing income-producing property of the ward or minor.
  • Investment management or investment planner’s fees. However, fees allocated to advice dealing with tax-exempt obligations ...

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