All brokerage fees related to the purchase and sale transaction are added to the basis. The annual maintenance fees related to your account but not to specific shares - are deducted on the schedule A line 22 - http://www.irs.gov/pub/irs-pdf/f1040sab.pdf - (subject to 2% AGI floor limitation)
Interest expenses are deducted are deducted on the line 13 schedule A.
Yes, all these expenses should be prorated as related to taxable and not taxable income. Only the part related to the taxable income is deductible.
Please see for reference IRS publication 550 - http://www.irs.gov/pub/irs-pdf/p550.pdf
The only difference that matter - if the fee related to a specific transaction or not
This is correct - the question you may need to ask - if these wrap fees are related to the account or to specific transactions.
Wrap fees cover investment advisory services, trading costs and other services provided in managing the account. Wrap fees are usually set as percentage of the account value.
Despite wrap fees include trading costs - there is no relation to specific transactions and therefore these fees should be treated as an account maintenance fees. You have to itemize to claim the deduction, and the deduction is limited by the 2% floor for miscellaneous itemized deductions.
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