Schedule C

[Guest Pension250]

We are a recordkeeping firm using a daily open architecture mutual fund platform. We charge clients a base and per participant flat fee (no asset based fees). I have a schedule C to complete. Our fees are over $5k annually. However, we reduce our fees by all subTA fees received from the mutual funds. The remainder due is pulled from assets at the custodian.

I cannot figure out how to report this...is the amount we get paid from the plan "direct compensation"? Or "indirect"? I have read the instructions, FAQ's, and called the DOL, who told me to call the CPA auditing the plan, who says "no clue!".

Also, the custodian emailed me back and said they do not provide any schedule C reporting for custodial services. But there are areas here where it appears I need to report float, custodial fees, over $5k...if the custodian has no reporting for the schedule C, how would I know what to report? And I cant figure out if that is direct or indirect either...they pull thier custodial fees from assets, but first use the revenue in the ERISA fee bucket which is paid from a Stable Value fund and also the plan money market fund.

This is so confusing. My return is due on Monday, this is a short plan year for a plan year ending April 2009 and already extended, so I am out of time...they could have used the paper forms on an 08 return if they filed by 12/31/09 but they didnt....

[Bird]

I'm not sure about the Sch C issues but you do have until March 31 to file electronically; there was an automatic extension for returns otherwise due by 12/31 and I think it would apply in this case.

[Laura Harrington]

We are a recordkeeping firm using a daily open architecture mutual fund platform. We charge clients a base and per participant flat fee (no asset based fees). I have a schedule C to complete. Our fees are over $5k annually. However, we reduce our fees by all subTA fees received from the mutual funds. The remainder due is pulled from assets at the custodian.

I cannot figure out how to report this...is the amount we get paid from the plan "direct compensation"? Or "indirect"? I have read the instructions, FAQ's, and called the DOL, who told me to call the CPA auditing the plan, who says "no clue!".

Also, the custodian emailed me back and said they do not provide any schedule C reporting for custodial services. But there are areas here where it appears I need to report float, custodial fees, over $5k...if the custodian has no reporting for the schedule C, how would I know what to report? And I cant figure out if that is direct or indirect either...they pull thier custodial fees from assets, but first use the revenue in the ERISA fee bucket which is paid from a Stable Value fund and also the plan money market fund.

This is so confusing. My return is due on Monday, this is a short plan year for a plan year ending April 2009 and already extended, so I am out of time...they could have used the paper forms on an 08 return if they filed by 12/31/09 but they didnt....

Hopefully what Bird said will work and you won't have to deal with this particular issue before Monday! But here is my two cents.

I think the amount you get from the plan is direct compensation. The amount of your fees offest by the sub-Ta you receive is indirect compensation.

As far as the custodian...I would contact them and say that they have to provide the data, otherwise you have to report them on the Schedule C as refusing to provide it. They don't have to provide the actual amount...it can be an estimate of the amount or the formula used to determine the compensation.