Background: Normally, expenses incurred in connection with buying, holding or selling property are capitalized and added to the property’s basis. That reduces your taxable gain when the property is sold.

But now the IRS says that fees paid for consulting and advisory services in wrap accounts offered by major brokers do not qualify as carrying charges. Instead, the fees must be treated as miscellaneous expenses. You are allowed to deduct miscellaneous expenses only to the extent the total for the year exceeds 2% of your adjusted gross income. Thus, you might get no tax benefit from these fees.