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cftcdez93
New Member

In 2017, I moved my IRA to another and the company I moved it from charged me a "Full Surrender Withdrawal Charge" and a contract fee; are these charges tax deductible?

The company I had my IRA investment with was very difficult to deal with and did not appear to be managing my investment well.  I decided to move the IRA to another investment company in 2017.  The company that I moved the investment from charged substantial "Full Surrender Withdrawal Charges" and a contract fee.  Are these charges tax deductible?

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dmertz
Level 15

In 2017, I moved my IRA to another and the company I moved it from charged me a "Full Surrender Withdrawal Charge" and a contract fee; are these charges tax deductible?

It sounds like you had the IRA invested in an annuity. These charges would generally represent an investment loss within the IRA and would not be deductible.  It's simply money you won't have to pay taxes on later.

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2 Replies
Opus 17
Level 15

In 2017, I moved my IRA to another and the company I moved it from charged me a "Full Surrender Withdrawal Charge" and a contract fee; are these charges tax deductible?

Probably not, unless this was a Roth IRA, and then only maybe.  In a traditional IRA, you contribute untaxed money and pay taxes on the money you withdraw in retirement.  Assuming they took the fees out of the IRA balance before sending the rest to the new trustee, this just means you will have less to withdraw and pay tax on when you retire.  It's not a current deduction but you aren't taking money out of your current taxable income.
*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
dmertz
Level 15

In 2017, I moved my IRA to another and the company I moved it from charged me a "Full Surrender Withdrawal Charge" and a contract fee; are these charges tax deductible?

It sounds like you had the IRA invested in an annuity. These charges would generally represent an investment loss within the IRA and would not be deductible.  It's simply money you won't have to pay taxes on later.
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