club_cafe: Commission question

iras1 on

A monthly trading fee is a deductible expense. If the $9.90 fee is associated with a specific stock transaction, then it is a commission which adds to the cost basis of the stock purchased or decreases the sales proceeds of a sale.

Ira Smilovitz

In a message dated 06/17/2008 9:29:31 A.M. Eastern Daylight Time, kfegan0088@bivio.com writes:

What would be the best way to enter the comission fee? Our
commission fee of 9.90 a month gets automatically withdrawn
from our checking account and we do not pay for commission
from within our brokerage unless we make a real time trade.
The 9.90 is based upon an autoinvestment schedule.
I do not want to enter it in where we enter our stock
purchased because it would be different from the amount in
the brokerage and bivio. I was thinking a non deductible
expense? or maybe a fee? Any suggestions would be
beneficial.

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Lynn Ostrem on

Interesting question, Kevin. So Ira, he wrote:

Our commission fee of 9.90 a month gets automatically withdrawn
from our checking account and we do not pay for commission
from within our brokerage unless we make a real time trade.

This would need clarification for me. What is the benefit of paying $10 per month to keep a brokerage account, only to pay additional trading fees when you purchase stock?

The 9.90 is based upon an autoinvestment schedule.

If there's an automatic investment into a particular stock, or stocks, then I would think the $9.90 would definitely apply to the cost-basis of the stock(s), and should be entered with the purchase.

I do not want to enter it in where we enter our stock
purchased because it would be different from the amount in
the brokerage and bivio.

Yes, but if the $9.90 is the cost of the automatic investment, in addition to the actual trading cost, it should be included as a brokerage cost.

We use a deep discount broker and make straight trades for $6.95/each. It's pretty simple. But I'm hearing about clubs using monthly services where they pay a flat rate for "X" number of trades per month. I'd be interested in how those clubs/investors are logging those monthly deductions.

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Lynn Ostrem, Minneapolis
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