Treatment of investment transaction fee


J

jo

My brokerage charges a fixed $6 fee (in addition to variable
commissions) for each buy/sell. Should this fee be treated as part
of the cost of the security or as an investment expense? Quicken has a
preference where you can enter the fee but no explanation on how it
should be treated (not that I'm surprised, really). It also doesn't
seem to work (is not carried over to the transaction screen) even
after setting the $ amount.

jo

========================================= MODERATOR'S COMMENT:
Since it is a fee associated with that particular trade, include
it as part of the cost basis or cost of sale.
 
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W

Wallace

jo said:
My brokerage charges a fixed $6 fee (in addition to variable
commissions) for each buy/sell. Should this fee be treated as part
of the cost of the security or as an investment expense? Quicken has a
preference where you can enter the fee but no explanation on how it
should be treated (not that I'm surprised, really). It also doesn't
seem to work (is not carried over to the transaction screen) even
after setting the $ amount.

jo

========================================= MODERATOR'S COMMENT:
Since it is a fee associated with that particular trade, include
it as part of the cost basis or cost of sale.

how do you treat a broker charge associated with dividends or mergers? I've
seen some charges for foreign dividends (not the foreign tax, but a broker
charge) and I've seen charges when a company merges (not a "trade" for the
owner).
 
S

Seth

Wallace said:
how do you treat a broker charge associated with dividends or mergers? I've
seen some charges for foreign dividends (not the foreign tax, but a broker
charge) and I've seen charges when a company merges (not a "trade" for the
owner).
I would consider the charges when a company merges to add to the
basis.

On the dividends, the amount the broker kept I wouldn't consider
income in the first place; it was never actually available to me.

Seth
 
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