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Are Investment Management Fees Tax Deductible in 2022?

 
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An analysis of the December 2017 Tax Cuts and Jobs Act and its implications for investment management fees in 2022.

A graph showing the percentage of taxable securities versus non-deductible investments.

Are investment management fees tax deductible in 2022? The answer to this question depends on the December 2017 Tax Cuts and Jobs Act (TCJA) and the specific fees associated with an investor’s portfolio. Under the TCJA, research and development (R&D) expenses are no longer deductible for the 2022 taxable year, while the immediate income tax deduction of up to 30% of adjusted gross income (AGI) is still in place. This means that while certain fees associated with investment management may be deductible, they must meet specific criteria to qualify.

ACNB CORP MANAGEMENT’s DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS for 2022 states that taxable securities represent 1.90% of total investments, and that 516,126 of their investments are tax deductible. This is significantly less than the 5,423 investments that are non-deductible, indicating that the majority of their investments are not tax deductible. However, it is important to note that the December 2017 Tax Cuts and Jobs Act does not affect ACNB CORP MANAGEMENT’s investments, as the Act only applies to R&D expenses.

Let us also look at the Management's Discussion and Analysis of Financial Condition and Results of Operations for ELASTIC N.V. for 2022. This document states that professional fees, accounting fees, audit fees, and tax advisory fees are non-deductible expenses. This means that any fees associated with investment management, including those related to taxes, are not eligible for tax deductions in 2022.

Real estate investment trusts (REITs) are a great way to invest in real estate without incurring the tax burden associated with owning property. For tax year 2022, the deduction for cash donations is typically limited to 30% of adjusted gross income. This means that any fees associated with investment management related to REITs will not be deductible in 2022.

Azelis Group NV’s FY2022 Results: Strong Momentum Drives 70% Growth document states that EUR 25m charges booked in 2022 are not tax deductible. This means that any fees associated with managing investments in Azelis Group NV will not be deductible in 2022.

In conclusion, investment management fees are not tax deductible in 2022, due to the December 2017 Tax Cuts and Jobs Act. Certain fees may still be deductible, but they must meet specific criteria to qualify. It is important to note that certain fees, such as those associated with professional services, accounting, audit and tax advisory, are not eligible for deductions. Furthermore, fees associated with REITs and Azelis Group NV are not tax deductible in 2022.

Labels:
tax cuts and jobs actinvestment management feestax deductionadjusted gross incometaxable securitiesprofessional feesaccounting feesaudit feesnon-deductible expensesreal estate investment trustsazelis group nv

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