Investment Fee

[clay]

Client's has her own business - Sch C.

No W-2 income.

Has a SIMPLE plan through a broker who charged $2000 to manage the account. Not sure if other non-IRA funds are in the account.

Investment fees are reported on Sch A, but the client takes the standard deduction so the deduction for the fee is "lost".

Can anyone tell me if there is any possibility of claiming investment fees on Sch C for that portion that is for the SIMPLE plan?

I saw something in the Pubs about being able to claim a "fiduciary" fee.

[JohnH]

Don't know the answer to your question, but I sure wonder why someone would pay a $2,000 management fee when they can set up a SEP at no cost.

[RJM]

Even if you itemize, I think the investment mgt fees are nondeductible if paid directly out of the tax-deferred account. Client would need to request from the account manager to have the fees paid outside of the investment account. And even then, I don't think there is any way you can legitimize a Sch C deduction for an owner's personal account. If owner had a qualified retirement plan for employees with pooled assets (ie not a SIMPLE), then mgt fees would be deductible on Sch C.

[Gail in Virginia]

I think even if owner has SIMPLE, if managment fees for all employees eligible are paid by the business and not out of the accounts, they should be deductible. However, $2000 seems a bit excessive for a fiduciary fee. That seems to be more of an investment management fee. The fiduciary fees for SIMPLEs using mutual funds tend to run around $35 per year here.

[RitaB]

Sounds like somebody's gettin the old screw-u-lus, to use my friend Catherine's new word.

[Catherine]

Sounds like somebody's gettin the old screw-u-lus, to use my friend Catherine's new word.

I give credit to Michael Graham, radio host here in the Boston area.