IRS Crimps Deductibility of Management Fees of Funds of Funds
The IRS has ruled in Revenue Ruling 2008-39 that management fees of upper tier partnerships that are not engaged in trades or businesses within the meaning of Section 162 are not deductible under Section 162 and are only deductible as miscellaneous itemized deductions (subject to the 2% AGI limitation) under Section 212.
