Investment Management Fees in a 72t IRA

You are here:
< Back

L1: Investment Management Fees in a 72t IRANew 72t – dob 1/13/64 – 1st dist 1/15/18
Setting up a new 72t. I cannot add new funds or remove funds beyond the calculated SEPP amount. I know funds within the account can be traded within the account as needed. What about custodial management or investment fees? Say they take a .5% management fee out of the account or take accounting fees. It is not a distribution to me but a cost of maintaining the account. Will this bust the 72t? Any other way to handle? Thanks.2017-06-08 12:13, By: basimmer, IP: []

L2: Investment Management Fees in a 72t IRAAs long as these expenses are not reported on your 1099R, they have no affect on your SEPP. Electing to pay these fees directly from the IRA have the benefit of paying them with pre tax dollars, but they also deplete your IRA faster. If your SEPP distribution is barely covering your expenses, having the fees directly deducted from the IRA will tend to provide some help in not having to bust the plan. But be sure you are clear that you do not want any deductions taken from your account that would be reported, because by the time you get the 1099R in January, it is too late to make adjustments. Note that the IRS has stated in PLR 2005-07021 that wrap fees (that include commissions) can be deducted directly from an IRA account and do not constitute a contribution to the account. They also will not be reported on the 1099R.2017-06-08 16:15, By: Alan S, IP: []

L3: Investment Management Fees in a 72t IRAAlan,
That makes sense. Thank you for the quick reply.2017-06-08 18:24, By: basimmer, IP: []