Another Door Closes

Financial Planning, May, 2008 by Martin M. Shenkman

The deductibility of investment management fees is a significant issue for many wealthy clients. The Supreme Court recently reached a rather unfavorable decision on this issue in Knight vs. Commissioner that effectively puts the kibosh on the ability of most trusts and estates to deduct investment management fees. It is vital to understand the rules so you can help clients maximize the deductions they might qualify for.

SOME BACKGROUND

Individual taxpayers can deduct certain miscellaneous itemized expenses on their personal tax return, Form 1040, Schedule A, such as investment-related expenses like custodian fees, investment counsel fees, tax preparation fees, legal fees relating to the production of income or protection of income-producing property and so on....

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