The Motley Fool Discussion Boards

Previous Page

Financial Planning / Tax Strategies

URL:  http://boards.fool.com/tmftaxes-wrote-this-doesnt-make-sense-to-me-10423076.aspx

Subject:  Re: This doesn't make sense Date:  11/19/1998  9:31 AM
Author:  piz Number:  6383 of 121568

TMFTaxes wrote:
[[This doesn't make sense to me. If they're willing to take the fee out of a non-IRA account and not
count it as an IRA contribution, why aren't they willing to accept a check in the same manner? I
asked this, but the phone drone just reiterated that I couldn't pay the fee by check. I know other
brokerages who charge a fee for Roth conversions accept payment that isn't treated as a
contribution - why won't Brown? Seems to me that for tax purposes this fee should be treated the
same way account maintenance fees are at brokerages who charge them - outside the IRA
contribution limit.]]

Piz...

I'm not a Brown & Co. consumer, so I can't really comment on your specific issue (other that to say that I agree with you, and it REALLY doesn't make any sense).

But fear not!!! (at least for deduction purposes)

If they send you an invoice for your custodial fees, and you can match that fee to a deduction taken from your taxable account, you should be able to claim the deduction without any problem.

So at least you've got THAT goin' for ya!!!


That would be true if I had a taxable account with them, but I don't. What they're saying is that if I send a check to cover the Roth conversion fee, they'll record it as an IRA contribution to my traditional IRA. Whether or not I send a check, they'll take the fee out of my traditional IRA. In other words, if I send the check they'll record a total of $2025 in contributions for 1998, even though that check is specifically designated by me in writing to be solely for the purpose of covering the conversion fee. If I don't send the check I'll have contributed $2000 but because they take the fee from my account it's as if I contributed only $1975.

I just don't see how they can handle this fee any differently than they would an account maintenance fee. It's only $25, but stupid policies really bug me.

What if I send the check anyway, then when I do my taxes treat it as if it's not a contribution but an account fee. I can document my case, but Brown will wind up reporting $2025 in contributions to the IRS. I can just see the IRS dropping an anvil on my head because of this. :-P

Piz
Copyright 1996-2014 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us