Admin Fee's IRA Entry

Hi, Bill.

How were they paid?

Remember the 2-step process:

Step 1: Understand what happened in The Real World.

Step 2: Record THAT in Quicken.

Don't try to do Step 2 before Step 1!

In the Real World, HOW did you pay the fees? Did you write a check on your personal checking account - outside the IRA? Or did you have the Trustee sell shares, collect the proceeds within the IRA, then use that cash to pay the fees?

The tax rule was (last time I looked, about 20 years ago) that if you paid the fee outside the IRA, it was deductible on your 1040 (if you itemized and subject to some limitations), but if you had the IRA Administrator pay the fee, then it was not deductible. (You get your deduction - sort of - but only after you retire and collect less in taxable distributions because the cash had long ago bee used to pay the fees.)

RC

The company (IRA) did everything. Seems they removed shares to cover cost of admin fee. # of shares did decline slightly.But also shows 2 such transactions--memo says one for employee and other for employer. So im assuming it had to be a sale and not taken from contributions. Thanks for your quick reply.

Hi, Bill.

Well, the managers can't pay the fee (even to themselves) with shares. They have to pay it with cash and they have to get the cash from somewhere. If you didn't contribute extra cash - before fee payment time - then they must have sold shares.

I've never had an IRA and never had a client with an IRA in Quicken, since I didn't start using Quicken until after closing my practice. But, the fee-payment transaction you are dealing with is probably like the reinvestment of mutual fund management shares - and we get that question here quite often. From the fund investor's perspective, it seems that management paid the fee (or dividend) in shares and the Quicken user tries to record it as a single transaction - reduce shares, record fee. That doesn't work well because it really is TWO transactions: sell shares and collect cash; use cash to pay fee.

In your situation, you probably need to record those two transactions inside your IRA. It's only slightly more work and makes a much clearer picture of what happened in the Real World. ;^}

RC

Thanks for the quick reply again. i have been trying to record as 2 transactions, but any "sale" of shares generates cash back to the account or its cash account. Which will that throw off my totals. The question is how do i get rid of the cash generated from a sale?

Hi, Bill.

Use it to pay the fee - immediately !

RC

You can enter a MiscExp transaction - category of your choice (IRA Fee, for example) - date it same day as the sale. MiscExp transactions reduce the cash balance in the account.

DONE thanks. Had a difference of share count but was able to track down all to those removal of shares. Cash at 0.0 for 1/1/2006 and shares correct also. Now just have to enter next 3 years of data. LOL

Thats basically what i did to remove cash < thanks

n Oct 20, 11:12 am, "John Pollard" wrote: