An owner of a company has his plan assets in a self-directed brokerage account. The other plan participants' accounts are at a platform. (Let us assume the other participants were given the option of opening their own SDBA and chose not to.)

The brokerage firm will allow the expenses that are due for the qualified plan account to be charged to the owner's personal brokerage account. He will then pay the expenses out-of-pocket and get a tax deduction.

Is there anything wrong with this? The plan is not paying the expenses.

Thank you.

Kate Smith

The employer is picking up expenses relating to some accounts and not others. That may well be impermissible depending on the expenses and the circumstances of the participants. For example, it is permissible for the employer to pick up expenses allocable to the accounts of employee participants, but not former employee participants. Also, the employer cannot pick up commissions.