Investment fees are costs associated with investing, such as management fees, sales charges, and advisory fees. Whether or not investment fees are deductible depends on the type of investment and the taxpayer’s situation.
Generally, investment fees are deductible if they are ordinary and necessary expenses incurred in the production of income. This means that the fees must be directly related to the investment and must be reasonable in amount. For example, management fees paid to a mutual fund are typically deductible, as are sales charges paid when purchasing a stock or bond. However, advisory fees paid to a financial advisor are not deductible unless the advisor is providing specific investment advice that is directly related to the production of income.