How do I deduct Investment Advisory Fee in California Return 2019? (2024)

I see that TurboTax provides a place under"Adjustments to Income" &"Investment Income Expenses"but I don't quite understand the instruction.I paid a few thousand dollars of advisory fee so I would really like to deduct it properly.

It said "if you had expenses related to producing California-taxed income that is not taxable at the federal level.... enter the amount as a positive number". (See screen capture below.) My investment is made up of CA municipalbonds (tax exempt-36%) and other bonds (taxable-64%). I don't see which portion of the investment is not taxable at federal but taxable at CA... How should I figure out what to fill in? Thank you!

‎April 13, 20203:48 PM

CYY,

I ran into this myself with advisory fees. The way I handled it was to take the ratio of the December 31, 2019 CA taxed other-state municipal bonds to the total portfolio value as of that date and multiply the advisory fee by that fraction.

AN75,

The place to input the investment management fee for the taxable portion of your account is under the Federal area Deductions and Credits. Way down at the bottom under Other Deductions and Credits, enter it as Other Deductible Expenses, not as Tax Preparation Fees. You would also enter things like safe deposit box rental there as well.

Only once on Schedule A Miscellaneous deductions. This should roll over to your CA540. What year are you referring to?

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if you've entered the correct amount of expense that would be deductible on the CA return, enter nothing in the Other Deductible Expenses section of the CA return.

Investment expenses such as these are no longer deductible on the federal side. The deduction applies only tothe portion of expenses relating to taxable income.