How to categorize broker returned excess fees

How did you process the fees when they were first charged, or how do you categorize similar fees as they are charged?  What types of fees are these?

You might see if this discussion helps:
https://getsatisfaction.com/quickencommunity/topics/recording-12b-1-fees?topic-reply-list%5Bsettings...

Basically, of there are other non-commission expenses you do pay to the brokerage, you should be able to apply these fee rebates to the same category.  I don't think these rebates show up to you as 1099 income anywhere, but I could be misinformed on that.  

shelquis said:

No, there are no fees which are categorized, otherwise I would have applied this "refund" to the same category. They refund the fees as cash to my account. My situation is precisely like Dawne's in the discussion which you provided the link to, and I notice she hasn't gotten an answer yet. It seems to me there should be some answer, I just don't know what it is. Let me ask a different way. If I enter a transaction to add that cash to the account, what should the "Action" be?

For an Action, I would choose "Deposit".

Given you don't have any applicable (direct) expenses to counter this 'rebate' income, I would be inclined to create an income category, no tax connection, and record the category that way.  That will give you an ongoing record as to how those fees accumulate.

Another option would be record the category as the same account ( [Brokerage Account 1] ) into which you are recording the transaction.  That type of self referencing transactions (commonly used for opening balance transactions) is a way to make cash magically appear and disappear.  I generally refrain from such magic because I like to know such things.  

shelquis said:

"For an Action, I would choose "Deposit".

Given you don't have any applicable (direct) expenses to counter this 'rebate' income, I would be inclined to create an income category, no tax connection, and record the category that way. That will give you an ongoing record as to how those fees accumulate."

OK, I think that sounds like a good approach. Does the action "Deposit" have any consequences regarding whether it's new money or not?Not sure what you mean by "new money", but I don't see any consequences to using that action. The money will be treated just like money you deposited from Aunt Edna, I. E., any outside source.

shelquis said:

Money from Aunt Edna would be new money added to the account. This refund of fees is money I had already invested, and that they pulled out but then returned.

I understand what you are saying with respect to this being money returned.  But how is it different from other 'rebates' you get?  You buy a product, part of the price goes to their marketing.  They send you a coupon or a rebate check.  Is that your 'old money' coming back to you?

Consider looking at it this way.  You 'chose' to pay them for a whole set of fees - commissions, administrative fees, management fees, advertising fees (12b.1), and so on.  Have you tracked all those?  They (the MF family) has turned around and said "we've made so much money off of you, we are going to give some of it back to your brokerage house as a thank you for bringing you in as a customer."  The brokerage says something similar, and passes (all of or some of) it back to you.  Thank you very much.  Yes, it is your money being given back to you, but it is also money you freely chose to spend through them.  It is their profits they choose to disperse.  When does it go from your money to theirs?

Another perspective:  You began the year with a share worth $10.  Over the course of the year, the MF does well and tallies up the results and finds the total value is now $11.  But they've had expenses as well and they take their $0.05 out and tell you the value is $10.95, the Net Asset Value.  Then through their arrangement with the brokerage and the brokerage's attitude toward you a valuable client, they kick back to you $0.02.  That $0.02 was never really yours.  They never told you how really well they had done ($11).  They only told you the net improvement up to the $10.95.

While I question the wisdom and value of tracking these rebates as 'old money', I'll offer another variation on my prior suggestion:  With the Income category set up as a non-tax-related category (per my understanding), you could record the rebate as MiscInc associated with the specific security.  The cash would appear in your account just like a non-reinvested dividend.  If you ask for the Investment Performance report on that security, it will include the rebate as return just like a dividend (cash) would be considered a return.  Unlike the dividend, it would not show up on tax schedules.  I think that may be more in line with your desires.  

Good Luck.

shelquis said:

I'll offer another variation on my prior suggestion:  With the Income category set up as a non-tax-related category (per my understanding), you could record the rebate as MiscInc associated with the specific security.  The cash would appear in your account just like a non-reinvested dividend.  If you ask for the Investment Performance report on that security, it will include the rebate as return just like a dividend (cash) would be considered a return.  Unlike the dividend, it would not show up on tax schedules.  I think that may be more in line with your desires.  

Thanks lurker. I've used this latest suggestion, and feel comfortable with it. I'd just like to thank you for all the help you've personally given me over the years. You've never let me down. I appreciate it.You're welcome.  And as a formerly active poster you to try to say:  Gracias for your kind words.