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Accounting for brokerage fees (vs. commissions)

Rocket J Squirrel

Morgan Stanley, being a full-service brokerage, still charges fees and commissions on security sales. Quicken can handle commissions but not fees. (The "Transaction Fees" property of investment accounts doesn't work for me. My commission is 7¢/share which "Transaction Fees" doesn't handle, and who knows how the other fees are computed?)

Do you guys bother to track fees separately or just roll them into commissions? If you track them separately, how exactly do you do that?

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q_lurker

I would choose to roll all the expenses into the commission field for the transaction. $9.41 commission in your example. I have never seen that account fees table used. I am not sure why it exists other than to give the user a summary as a reminder.

All that said, my reality is simply entering the net transaction total $10,918.87 and not bothering with tracking fees and commissions.

mshiggins

Rocket, have you considered dumping Morgan Stanley?

Rocket J Squirrel

mshiggins said:

Rocket, have you considered dumping Morgan Stanley?

I have, but they provide me value in other ways.

Sherlock

We've always collected all of the brokerage's transaction fees in the transaction's commission field. My understanding is the investment account's Transaction Fees form is informational.

Jim_Harman

One issue in a taxable account is how the transaction and processing fees are treated for tax purposes. Commissions should be included in your cost basis, and I think the fees should be included as well.

If you look up your cost basis on the Morgan Stanley website, does it include the transaction and processing fees? If so, then it should be proper to add the fees to the commission when you record the purchase in Quicken and you should get credit for them when you sell the security.

Consult your tax advisor.

Rocket J Squirrel

Jim_Harman said:

Consult your tax advisor.

That's you now, @Jim_Harman .

Purchases cost nothing. The commission & fees are imposed on sales. But they are subtracted from my net proceeds, reducing my taxable gain just as if they were part of the purchase price.

Snipped from MS site: