tag:infinitekind.tenderapp.com,2009-01-14:/discussions/investments/5946-investment-feesInfinite Kind: Discussion 2021-08-15T23:20:20Ztag:infinitekind.tenderapp.com,2009-01-14:Comment/491993872021-05-16T23:08:41Z2021-05-16T23:08:41ZInvestment Fees<div><p>From: sprimost (Just a user....)</p>
<p>I am going to assume that you are US based. The opinion stated here is<br>
not intended for tax advice, but meant to provide a method, based on my<br>
experience, as to handling of this situation.</p>
<p>In general, transactions (buy/sell) as far as short-term vs. dividends<br>
vs. long-term is irrelevant. By the time, you are "forced" to sell to<br>
meet the Required Minimum Distribution (RMD) withdrawal requirements,<br>
the funds withdrawn are treated as ordinary income. (personally, I have<br>
given up trying to keep track of how the dividends are paid!)</p>
<p>But, if you are watching how well the investments are doing, then it<br>
might make a difference, although, again, it is all the same as far as<br>
accounting for return on the investment. The only catch is that the<br>
deduction of the fee does cut into the ROI, so I an see that you really<br>
do not want to account for the deduction by using a short-term "dividend".</p>
<p>What I have done (not saying it is right, but it doe seem logical) is to<br>
enter a transaction as a misc-expense for the fee. The balance in the<br>
account will be a negative number. You will need an expense category for<br>
this. When you see the report from the institution for selling of the<br>
shares,, then enter the number of shares and share price to cover the<br>
expense, and the balance in the account will revert to zero.</p>
<p>Thus, at the end of the period, you can figure your return as<br>
ending-balance minus starting-balance (investment-Report) and know how<br>
much paid for fees (income and Expense Report)</p>
<p>Others may comment....</p>
<p>/sp</p></div>sprimosttag:infinitekind.tenderapp.com,2009-01-14:Comment/491993872021-05-16T23:17:01Z2021-05-16T23:17:01ZInvestment Fees<div><p>I'm a fellow user.</p>
<p>I'm not sure there is any other viable approach.</p>
<p>What you need the transaction to do is to reduce the number of units you own in the account, but also to reduce the current value of the investment by the amount of the fees.</p>
<p>In doing this the amount of the fee is not going to correspond to the cost basis of the units, hence Moneydance thinks it is a capital gain. If you were to change it so there is no capital gain being reported it would throw out the amount of the investment.</p>
<p>This typically a problem with funds that handle fees by the way of unit reductions. Some other funds force the use of a cash account with minimum balance requirements to handle fees and that all funds go through.</p>
<p>In my experience capital gain reports produced by finance programs for Fund type investments based on the data that you have in the program are generally rubbish in any case since embedded in the unit data is not just simple purchases and sales but it can also include income and expense items.</p></div>dwg