Hi,
I dropped out of an investment club in 2008, and a 3% withdrawal fee was deducted from the gross amount of my account. The 3% was retained by the remaining members of the club. The club's by-laws specify that this withdrawal fee is to be deducted from the money distributed to the member who is leaving in order to pay for broker commissions and/or transfer expenses.
Can I deduct that "withdrawal fee" as an investment expense?
Thank you.
Orrie
That is an investment expense, a schedule A micellaneous deduction subject to reduction by 2% of AGI.
In fact, your investment club should be reporting this to you on some form. If your club is a partnership, your partnership Schedule K-1 should list this as an investment expense and contain instructions to tell you it goes on schedule A misc 2% deductions.
Not all miscellaneous deduction result in an actual tax benefit.
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