Tax Law (Questions About Taxes)/Mutual Fund Startup


Hello Randall,

I'm one of the experts in the Music/Oldies category and don't normally get to ask the questions, but here goes:

In December, I started an investment in a mutual fund and the startup cost (broker's fees) is $1,150. Can I deduct that as a capital gains (loss)? I do not itemize; I take the Standard Deduction.

Thanks very much for the help!


Well, first, that sounds like an extraordinary amount of "start-up cost" for an investment account. There should not be ANY investment cost with investing in a mutual fund.

It is not a capital gain or loss. I would like to know more about this fee before I comment further.

Exactly what type of investment was this? Was this a management fee? Consulting fee? Very odd for this type of investment. Also, can you tell me approximately how much you invested?  

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Randall Klein, MBA, EA


I am an expert in personal and small business taxation, including Forms 1040, 1120, 1120S, 1065. I can answer any type of tax question except those that are requesting help in illegal tax evasion. Tax avoidance is legal, however. I do not do offshore trusts, or opt-out of the tax system type of queries.


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