How to handle Revenue Credit Transactions in 401K account

Camille43081

When I download my Fidelity 401K activity, there are often "revenue credit" transactions that come over as "Bought".  These are return of fees from the plan, which increase the number of shares for various funds, without any cash impact to my plan.  However, since they are coming in as "Bought", each one assumes a drop in the cash balance to cover the purchase.  I've been doing an "update cash balance" to reverse the impact, but is there a better way to record these?

Sherlock

I prefer entering a deposit transaction for the revenue credit received.

Camille43081

Sherlock said:

I prefer entering a deposit transaction for the revenue credit received.

A deposit transaction requires a payee - what do you use for that field?  And do you put it to Investment Expense to show it as an offset of plan fees?

UKR

Wouldn't / shouldn't that be more like recording a Reinvested Dividend or Interest?

Boatnmaniac

I used to get Revenue Credits and treated them as Reinvested Dividends because someone once told me that if the fees had never been charged to begin with they would have been distributed to us as dividends, instead.  By changing the Bought transaction to a Reinvested Dividend there will be no impact to the cash balance and, therefore, no cash balance adjustment transactions to make.

Being that this is a 401k account there is no tax impact involved with classifying them as Reinvested Dividends.

Sherlock

Camille43081 said:

Sherlock said:

I prefer entering a deposit transaction for the revenue credit received.

A deposit transaction requires a payee - what do you use for that field?  And do you put it to Investment Expense to show it as an offset of plan fees?

I use Fidelity as the payee and do not enter it as an Investment Expense.  

UKR said:

Wouldn't / shouldn't that be more like recording a Reinvested Dividend or Interest?

The revenue credit is a reimbursement of some portion of the fees associated with specific mutual funds as negotiated with the employer.  I think of it more like a cash rebate.