Discussion:Unclaimed Funds Search Fee
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Discussion Forum Index --> Tax Questions --> Unclaimed Funds Search Fee
| 28 March 2007 | |
| I have a client who used a search company to retrieve some unclaimed funds. The search company charged her 35% of the recovery amount. Now my question is can I deduct the fees of the search company that amounted to $12,000 as schedule A investment fees or since the investment company sold the securities can I treat it as expense of sale (ie reducing the gain on the sale of the securities)? Thanks in advance | |
| 28 March 2007 | |
| Kevinh5...I question that it can be taken as basis considering hiring a search company is not necessary to retrieve unclaimed funds. There are so many resources out there and it can be done without expense.
WBR-it isn't an investment fee because the investment company had nothing to do with the search...to my mind it was not an expense of the sale because it was not a necessary expense. taxea | |
| 28 March 2007 | |
| I would think it a cost incurred to secure the property/retrieve the investment value. Was there a special reason to use the search company? There are many expenses incurred that some might consider "unnecesary". I agree with Keven5. | |
| 28 March 2007 | |
| You don't need an accountant to do your taxes either (yeah, right), but you get to deduct their fee. | |
| 28 March 2007 | |
| Taxea, Kevin is giving you the correct answer. Expenses relating to property that you hope to own are never deductible (even if the search is unsuccessful); however, such expenses should be added to basis of the property ultimately recovered. | |
| 9 March 2008 | |
| this thread will now pop when you search Recovery company basis | |
Actionbsns (talk|edits) said: | 9 March 2008 |
| Good job Kevin, otherwise I think a search would lead people to our infamous "void checks, girl scout cookies, etc. etc. etc." thread, which started out sort of in this vein. Good discussion | |
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