UnThreaded | Threaded | Whole Thread (4) | Ignore Thread Prev Thread | Next Thread
Author: mkraft Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76384  
Subject: Brokerage fees in IRA account Date: 8/6/1999 2:19 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0

Do brokerage fees for transactions in an IRA account *have* to be paid from the IRA assets?

-- e.g., if you want to buy stock in an IRA account using a 'limit' order but discover that after including the brokerage fee you will overshoot your account balance by a few dollars if the order goes through, can you arrange to pay the brokerage fee directly (i.e., not from the IRA assets) rather than cut your purchase by a share?

Thanks.
Print the post Back To Top
Author: DownwardSpiral One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 12902 of 76384
Subject: Re: Brokerage fees in IRA account Date: 8/6/1999 2:38 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
mkraft asked:
<<Do brokerage fees for transactions in an IRA account *have* to be paid from the IRA assets?>>

Yes!

One [kind of] exception: If you have an annual accont maintenance fee, you can choose to pay that with funds from outside the IRA.

A technique that I have used is to make a small contribution for this tax year to cover a purchase that I want to make. Typically I [unFoolishly} make my IRA contributions near tax time for the preceding year. This was the norm when I was on the "borderline" in AGI for a deductible IRA, and I wanted to see where my income was before I committed the funds.


Print the post Back To Top
Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 12905 of 76384
Subject: Re: Brokerage fees in IRA account Date: 8/6/1999 2:49 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
Mkraft asks:

<<Do brokerage fees for transactions in an IRA account *have* to be paid from the IRA assets?

-- e.g., if you want to buy stock in an IRA account using a 'limit' order but discover that after including the brokerage fee you will overshoot your account balance by a few dollars if the order goes through, can you arrange to pay the brokerage fee directly (i.e., not from the IRA assets) rather than cut your purchase by a share?>>


In general, the answer is yes trading fees must be paid from assets within the account. You could send in a check to pay for them, but that check would then count as part of and against your annual contribution limit of $2K per year. If you already made that $2K contribution, then sending in the check would result in an excess contribution giving rise to all sorts of hassle and a possible 6% penalty on that excess.

Bottom line: Pay trading costs with money in the IRA.

Regards..Pixy

Print the post Back To Top
Author: tonyw44 Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 12919 of 76384
Subject: Re: Brokerage fees in IRA account Date: 8/6/1999 4:57 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
Nope. You're stuck. All the fees that are incurred in an IRA must be paid with money from there. However, in your hypothetical situation, you could put money into the IRA for the current year and use it that way, assuming that you haven't put your full contribution in yet.

There's nothing you can do to get over the $2,000 limit.

Print the post Back To Top
UnThreaded | Threaded | Whole Thread (4) | Ignore Thread Prev Thread | Next Thread
Advertisement