Brokerage account fee

[Kram BergGold]

This year I am seeing many brokerage accounts where a $150 fee is charged. This fee is standard and has nothing to do with the amount in the account or amount of trading activity. To me this is like a fee a bank charges to have a personal checking account and is non deductible. What is your take on this?

[Koss]

Account Fees

I think it may still be deductible as an expense that is directly related to holding, managing, and protecting capital assets. I would argue that it is more like a safe deposit box fee.

Suppose I own rental property as an individual. I open a non-interest bearing checking account that is used exclusively for collecting rent, paying the mortgage, paying for repairs, and holding the tenants' security deposits. And the account generates some sort of monthly service fee because it doesn't meet the bank's minimum balance expectations.

It's a personal checking account, meaning it's not owned by a business entity, and it's not an investment instrument such as a certificate of deposit, because it doesn't pay interest.

But the account is used exclusively to manage income producing assets. So I would argue that in this context the bank service charges are deductible--on Schedule E.

The brokerage account fee you are referring to is probably deductible on Schedule A, just like a safe deposit box fee.

Is it a "wrap account?" Ask some more questions. You might find that the annual fee has the effect of making the client eligible for commission rates that are lower than those for an account that doesn't have the fee.