New Schedule C form

[Belgarath]

Wow, I'm not sure I know enough about the securities world to even ask the question right, but here goes.

Edit is because I've cleared up the terminology that I should be using, which may make the question less confusing.

Suppose you have Mr. A, who is a registerd representative with Merrill Lynch. So apparently, if he sells a client some mutual funds with, say, Fidelity, it is through Merrill Lynch as his broker-dealer. Let's say the commissions payable by Fidelity equal $10,000, and are paid to Merrill Lynch. Merrill Lynch takes a cut of $500.00, and pays the balance of $9,500.00 to Mr. A.

When it comes to reporting this on the Schedule C, is it acceptable to merely list Merrill Lynch for $10,000? Or should Merrill Lynch be listed for $500.00 and Mr. A for $9,500.00? I'm finding this very confusing. The DOL FAQ's didn't clear up this question for me, but that's possibly because I understand so little about how the securities world really works.

Second question - suppose a TPA has an alliance with an outside mutual fund company, which also has a recordkeeping platform. The client puts 1 million with the mutual fund company. The mutual fund company then pays the TPA some sort of finders fee, or asset based, fee, whatever, of $1,000.00. But the TPA must turn around and pay the mutual fund company $800.00 for recordkeeping services. Does the Schedule C show:

a. $1,000 to the TPA

b. $1,000 to the TPA and $800 to the mutual fund company

c. a net of $200 to the TPA and $800 to the mutual fund company

d. $1,000 to the TPA and $800.00 to the mutual fund company

e. other

b & d both seem wrong, as they seem to double up and show an artificially high amount. I'd lean towards a. Thoughts?

[K2retire]

I have no idea of the answer, but I believe these are exactly the kinds of questions that have so many people up in arms about increased fee disclosure rules!

[Earl]

Seems to me that

#1 - The plan paid Merrill. Merrill would be the Broker Dealer on the account and be who the check is made payable to.

#2 - The Plan paid the TPA. Agreements the TPA has with others is the TPAs business. Alliances would be TPA disclosure to clients, not government reporting.

Probably not 100% right but I focus on who the plan pays only.