Question

Investment expenses are the taxpayer's allowed deductions directly connected with the production of investment income. With regards to the Tax Cuts and Jobs Act, investment expenses that a taxpayer can deduct on his or her California income tax return for tax year 2018 include all of the following except:

Investment interest expense

Depreciation allowed on assets that produce investment income

Depletion allowed on assets that produce investment income

Software or online services used to manage the taxpayer's investments

Answer 1

Tax Cuts & Jobs Acts states that no more deduction for miscellaneous investment-related expenses. Prior to the TCJA, taxpayers were allowed tax deduction for certain expenses like fees for investment advice, IRA custodial fees, and accounting costs necessary to produce or collect taxable income. For tax years 2018 to 2025, these deductions have been eliminated.

Hence, a taxpayer can deduct all Investment expenses except Software or Online services used to manage the tax payer's Investments.

Correct is option 4 .