I came across the excerpt below online. I am not clear on the mechanics or accuracy of what is being stated. In the scenario presented, it would appear that the advisor is paid the fees from the RMD and/or having a custodian code the fees as a withdrawal. I’d want to clarify the ability and process of deducting of Advisor Fees paid from an IRA account. My understanding is that fees paid inside IRAs cannot be deducted.

“…if you are retired and no longer contributing to your IRA or other retirement plan, then you may be better off paying the management fees from inside the retirement account. That’s because an advisory fee withdrawn directly from a retirement account is not reported as taxable income. Nor is it tax deductible. Think of it as a tax-free withdrawal.

Here is an example. Rob and Mary Jane, both single, are retired and have $1 million IRA accounts. They each pay a $10,000 investment management fee. Rob withdraws $40,000 from his IRA this year and pays a $10,000 investment management fee using outside funds from his checking account. He reports a $40,000 taxable IRA distribution on his tax return and claims a $10,000 miscellaneous itemized deduction that may be reduced by the 2% AGI limit, depending on his AGI and what other miscellaneous deductions he can claim.

Mary Jane withdraws $30,000 from her IRA and her advisor draws her $10,000 investment management fee from that account. Because Mary Jane paid her management fee from funds inside her IRA, her reportable IRA distribution is $30,000 even though her total withdrawal was $40,000. Rob and Mary Jane both withdrew $40,000 from their IRA accounts, but Mary Jane has $10,000 less taxable income and Rob has a possible $10,000 tax deduction. Your tax practitioner can run the numbers for you to see which way works best.”

I appreciate some expert feedback and/or code section references. THanks,