Investment Expenses & Fees

[EA_TAX]

Investment fees thread continued

Thank you for this discussion( I found it through the advanced search function).

As a junior member, just want to clarify: my client has multiple investment accounts(roth ira, ira, and annuity) and a medicaid irrevocable trust. The fees charged by the broker on each of these accounts are deductibles on schedule a subject to 2% of AGI if the broker has NOT already reduced the taxable amount by deducting the fees, and only for the ira, and annuities accounts. Therefore the Roth IRA and irrevocable medicaid trust fees are not allowable as a deduction because the generated revenue from the accounts is tax exempt. Pub 550 is the source.

Thank you in advance, apologies for posting on a holiday.

EA_TAX NY

[FEDUKE404]

Fees paid for IRA management

Thank you for this discussion( I found it through the advanced search function).

As a junior member, just want to clarify: my client has multiple investment accounts(roth ira, ira, and annuity) and a medicaid irrevocable trust. [b]The fees charged by the broker on each of these accounts are deductibles on schedule a[/u] subject to 2% of AGI if the broker has NOT already reduced the taxable amount by deducting the fees, and only for the ira, and annuities accounts. Therefore the Roth IRA and irrevocable medicaid trust fees are not allowable as a deduction because the generated revenue from the accounts is tax exempt. Pub 550 is the source.

Thank you in advance, apologies for posting on a holiday.

EA_TAX NY

Not quite sure what this latest point is (original issue was "allocation" of otherwise deductible fees?).

As Burke stated, you cannot deduct any fees within an IRA account. Period. No matter what the investment person tells you. If the account fees are independently funded from an outside source (write a check!) then perhaps there is a potential (limited) deduction.

Are you somehow saying that if your client has a Form 1099-R for $10k from a traditional IRA, and last year he "paid" (better "incurred") $1k in management fees, that you are deducting $1k as a miscellaneous itemized deduction.

Ah....NO.

Barring intervention of Form 8606, $10k of taxable income, no Schedule A deduction, end of that story.

FE

[EA_TAX]

Thank you

EA_TAX NY