Dyons

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  • Dyons
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    Thanks again for your thoughtful response, Kaye.

    Responding to two points you raised:
    1) No, the “maintenance fee” is included as a part of the fees for the “summer sea term”, as the marine academy calls it. It is paid to the school, and to no other entity – just like the spring and summer “shore” terms.
    2) There is a “transportation fee” also included for the summer sea term. This is a non-QTRE, as per the rules you quoted. This transportation is for a cadet to fly to a foreign port where the ship is docked to start his sea term, or to fly back to the US after his 45 day term ends. (The ship goes from the academy in the US to Europe and back.)

    Thus, one again, this “maintenance fee” appears to be something special. It is not student-specific, essential for their degree (licensing requirements) and seems to meet all the conditions of a QTRE. However, for reasons best know to them, the school does not think so.

    The question is if I can.

    Thanks again.

    • This reply was modified 2 years, 7 months ago by Dyons.
    Dyons
    Participant

    Thanks very much for your response.

    In fact, the curious thing is that the school has specifically allowed room and board on the ship during the 45-90 day “sea term” as an allowed QTRE, while noting that room and board on shore (during the spring and summer terms) are not QTRE.

    Thus, excluding the fees for the maintenance of the ship from QTRE appears somewhat arbitrary and capricious.

    I guess the burden is on me as a taxpayer to decide if I would like to face a potential IRS inquiry if claiming it. My question is if the IRS accepts the school’s view on QTRE as definitive or are they open to interpretations by the taxpayer? Your thoughts on this would be appreciated.

    Thanks again.

    Dyons
    Participant

    Thanks, Kaye, for your thoughtful and detailed response.

    At least Fidelity seems to agree with interpretation (a), if their trades web site interface is any gauge. In my case, when attempting a “trial” trade, I notice that Fidelity has populated the unsold shares from the 1998-6/2000 period with the average cost calculated for the sale on 6/2000. For both uncovered and covered shares after 6/2000, Fidelity assigns the actual NAV for the date of purchase of additional shares. Thus, at least Fidelity seems to think that noncovered share purchased after my one and only sale should not use average cost.

    Thus, I feel quite comfortable about interpretation (a), especially after your detailed explanation and Fidelity’s implicit confirmation.

    Many thanks for your help.

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