|Investment expenses are deductable on Schedule A as a
miscellaneous itemized deduction. They are subject to a 2% threshold, based on your AGI
(Adjusted Gross Income.) Investment expenses you pay acquire income producing investments,
such as "margin interest" expense on your brockerage account, is deductible up
to your "net investment income."
Net investment income is as follows:
- Investment income less investment expenses.
- Examples of investment income are interest income,
divided income, and short term capital gains.
- Examples of investment expenses are investment
management fees, telephone expenses to call your broker or financial planner, travel to
your broker or financial planner, investment periodicals such as Money Magazene,
Bairuns, Investors Business Daily, etc., part of your cable bill if you watch CNBC or
other investment type shows. Also qualifying as investment expenses is postage you pay
related to your investments + even your safety deposit box container.
- Any investment interest expense that you can not deduct in the
current year because of the limitation explained above, may be carried forward
You may treat your long term capital gains as investment
income IF you forego the favorable 10%/20% capital
See Spring 97 Newsletter, page 2, for more details on this