Post-TCJA killed §212 investment expense deductions — a family office management LLC restores them under §162.
Post-TCJA, individual investors lost §212 deductions for investment advisory fees, custodian charges, and family office expenses. Workaround (Lender v. Commissioner strategy): family members form an active-trade-or-business Family Office Management Co (LLC or partnership) that provides real services (investment management, bill pay, tax coordination, deal sourcing) to family entities in exchange for fees. Because it's an ACTIVE trade or business, expenses become §162 (fully deductible). Requires real substance — employees, office, arm's-length pricing.
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Borrow against cash-value life insurance at guaranteed rates.
Deduct 60–80% of working-interest investment in year 1.
Insure your own business risks — premiums are deductible.
Hedge funds + alternative assets inside a tax-free wrapper.
Sell appreciated assets tax-free + get lifetime income + charitable deduction.
Deduct now at FMV, grant to charity later — skip cap gains.
Lock in the $13.6M estate exemption before 2026 sunset.
Transfer appreciation to heirs with near-zero gift tax.