Hi, I have been dripping NDE for about a year. I received a very surprising 1099 from them. Although the company pays all the borkerage fee, for my initial investment they charged $15. In total, for the whole year, the brokerage charges are like $40. But, I only have to pay taxes on this amount as it is reported on the 1099. What bugs me is that there was no mention of such fees in the plan documents. The fee they charge eveytime is arbitrary, which is understandable, but not correct if they are very high. Do you guys think there is somme foul play? Should all of these fees have been disclosed in the begining? thanks, -ab
The fee they charge eveytime is arbitrary, which is understandable, but not correct if they are very high. Do you guys think there is somme foul play?I don't think that it's "arbitrary" although it may be high. You should see the fees listed on your statements, even if it's under Company-Paid. Generally, there should be a set fee for cash purchases and one for dividend reinvestment, plus a cents-per-share commission.Should all of these fees have been disclosed in the begining?This is a gray area, but Yes, they should. However, they can simply claim that they were disclosed by virtue of the fact that they state that the company pays the fees. Unfortunately, anything that the company pays can be considered income to you...per the IRS.I'm not familiar with the NDE plan, but Mellon charges set fees for the International Paper plan...which are paid by teh company (and therefore income to me). For each cash investment a $5 fee applies; for each dividend reinvestment a $1.50 fee applies (plus commissions). So, at a minimum, four quarterly reinvestments generate "additional income" of $6 ($1.50 times 4) and cash purchase fees could be $60 if monthly checks (or EFTs) were invested. So I imagine that NDE is similar.
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