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Author: irasmilo Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 123527  
Subject: Re: Deductable Investment Management Fees Date: 11/27/2003 11:45 PM
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Sorry I have not had a chance to respond to your last reply. I've been traveling etc.

I posed your latest thoughts on this topic to my accountant and he says to the contrary " ... it is a well established principal that you (the taxpayer) can call an item of income or expense anything you want... but in the final analysis the IRS will call it what it is ... (i.e. "substance over form")... which is the principal that will nearly always determine the final outcome ..."

However he also said that in the final analysis it is the taxpayer's responsibility to provide the "supporting documentation ...etc." to prevail with the IRS. So as you suggested if I can't get the broker to give me an appropriate breakdown of the fees then I should find another broker. I wonder thou if the next broker will be any better?

I don't think your accountant has disagreed with me. He said that you have a choice but you need the documentation to back it up. I said that you have the documentation, so you can't choose to ignore it just because it doesn't support the position you want.

If you can find a broker who is willing to call the fees a commission, or is willing to break out trading costs for you, then you will have what you need.

Of course, you can always choose to do what you want and hope that the IRS doesn't choose your return for audit. The odds may be in your favor, but I can't recommend playing audit lottery.

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