How do I record investment fees from sale of investments.

ksrothschild

Over the course of the year, I have a financial management company who charges me fees for managing my 401k account. The fees are taken out from the sale of my 401k stock shares, but there is no way I could categorize them for income tax purposes.  I hope there is a method for me to categorize such investment fees.  Thank you

K.O. (Win-Premier)

Consult your tax professional but I don't think these fees you are referencing can be deducted as investment expenses on your income taxes.  They would be included in your cost basis and thus from a tax perspective are factored in when determining gains (proceeds - costs) assuming this is a regular 401(k) and not a roth 401(k).

ksrothschild

K.O. (Win-Premier) said:

Consult your tax professional but I don't think these fees you are referencing can be deducted as investment expenses on your income taxes.  They would be included in your cost basis and thus from a tax perspective are factored in when determining gains (proceeds - costs) assuming this is a regular 401(k) and not a roth 401(k).

Kevin, thank you for your input... still yet, I would like to categorize such fees so I know how much was expended each year. 

Thanks!!!  ;-)

NotACPA

K.O. (Win-Premier) said:

Consult your tax professional but I don't think these fees you are referencing can be deducted as investment expenses on your income taxes.  They would be included in your cost basis and thus from a tax perspective are factored in when determining gains (proceeds - costs) assuming this is a regular 401(k) and not a roth 401(k).

Do the Investment Transactions report.  "Commissions" can be displayed as a column there.

And I agree with Kevin that commisisons impact your Gain or Loss ... but aren't themselves "Investment Expenses" that can be included on your tax return.

And since this is in a 401k, including even the CapGain/Loss isn't a factor as NOTHING except putting money into a 401k, or taking it out, appears on your tax return.

Jim_Harman

Do you mean that the fees are taken out by selling stock shares? For example if the fee is $50.00 they sell an equivalent number of shares from the stock(s) in the account then remove the money from your account? If so, this would be one or more Sell transactions with the proceeds going to Cash in your account, then a Withdraw to remove the cash. You can assign a Category to the Withdraw to keep track of the fees.

Whether these fees are deductible is another question, as Kevin notes.  

K.O. (Win-Premier)

K.O. (Win-Premier) said:

Consult your tax professional but I don't think these fees you are referencing can be deducted as investment expenses on your income taxes.  They would be included in your cost basis and thus from a tax perspective are factored in when determining gains (proceeds - costs) assuming this is a regular 401(k) and not a roth 401(k).

I would think you may be able to create a special category for them and then categorize cash transactions equal to the amount of the fees.  But this would mean you would have to remove the correct amount of fees from each investment transaction thus increasing your cash balance by the amount of the fees so you can remove the fees from the overall account using the new category.  The effect of doing this is that while you would have record of the fees each transaction in Quicken would differ in total amount from the transaction in your brokerage account making it more difficult to reconcile.

q_lurker

The fees are taken out from the sale of my 401k stock shares, 

So periodically, the manager removes X.xxx shares from you account those shares having a value of $Y.yy.  no other 'transactions other than the shares disappearing.  Correct?  If so, how have you been handling these transactions?  I would suspect a "simple" Remove Shares transaction.  

What I would do -- on those occasions, Sell Shares X.xxx for $Y.yy with the proceeds going to you cash balance in the 401k,  Then enter a MiscExp transaction of $Y.yy against the category of your choosing (Inv Expense - non-deductible, or Mgt Fees, etc.).  You may also be able to use a Wrtie Check or Withdrawal type of transaction.  Be alert as to how Quicken treats that type of withdrawal or expense.  It may show up in some places as a 'taxable' distribution.  Deal with that however you choose.  With this approach, your report showing these fees will need to include the 401k account.  
Another option may be to direct the proceeds of the sale to a 'regular' cash account and expense the fees from that 'regular' account.  That is more likely to show up as an taxable come disbursement from the 401k, but the fees may more readily report without directly involving the 401k account.  

ksrothschild

Thank you all for your thoughts... I'll see what's the best for me so as not to mess up the Quicken innards in recognizing such transactions in a different manner.

Have a great week!!!

Unknown

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Unknown

I just set up a different category.  I have some annuities I manually track.  Every quarter they charge me an annuity benefit fee, which results in the sale of some shares of the annuity to pay for the fee.

I mark it as a SELL transaction (since I don't own those shares any more) and then a MISCEXP with a category I set up as "Annuity Benefit Fee".  I can then track those.

I'm assuming you could do the same for your investment fees charged too, since it results in the sale of some of the shares.