Q: I've been wanting to open an IRA. However, whenever I discuss the matter with a broker I am presented with various plans that require custodial/maintenance/management fees over and above the broker's commission. Isn't it possible to walk into a discount broker's office and buy 100 shares of XYZ Corp. as my IRA contribution for the year? Can the total exceed $2,000 a year? Are taxes deferred on capital gains realized on the holdings?

A: Let's take the easy questions first: No, your annual IRA contribution may not exceed $2,000. If you're married and your spouse has no earned income, the ceiling goes up to $2,250 -- but that must be split between two separate accounts, with no more than $2,000 going into either account.

Capital gains may accumulate in the account without current tax liability in the same manner as other account earnings. However, in the IRA they lose their capital gain nature and will be taxed as ordinary income when you eventually withdraw funds from the account.

Now let's tackle the more complicated question. Your IRA must be managed by a trustee. If you want to manage the investments yourself, it must be done through a "self-directed" IRA established at a broker who is an approved IRA trustee. And that, of course, leads to the fees you're unhappy about -- because as trustee, the broker has some reporting rules to comply with.

Theoretically, you could name another individual (but not yourself) as trustee -- but that individual would have to file a copy of the trust agreement with the IRS and request approval of the contract; and he or she would be subject to all the reporting requirements, too.

The major brokerage houses -- including some of the discount brokers -- have pre-approved agreements requiring only your signature to activate the account. If you want to avoid the various charges, though, you'll have to give up the idea of a self-directed account.

Try a certificate of deposit at a savings institution; although these are not flexible instruments, there are generally no fees of any kind. Or start an IRA with a no-load mutual fund family -- no commissions, low annual fee (perhaps $10 a year) and the option of moving your IRA money at will among their various funds.

Q: In our most recent county tax notice we found a statement, not previously shown, to the effect that certain items included in "Metropolitan and other charges" -- referring to ad valorem and front-foot benefit charges -- are not deductible on our federal income tax return. When we asked the IRS about this, we were told that ad valorem and front-foot benefits are deductible as property taxes on our federal tax return. Can you tell us the correct answer?

A: The correct answer is: "It depends." (How's that for a cop-out?) A county or city tax of this type may or may not be deductible depending on the purpose of the tax.

If the "tax" is in reality a fee for services provided -- such as water and sewer or trash collection -- then it is a personal expense and not deductible on Schedule A of your income tax return. (If the property is rental property, then the charge may be claimed as an expense on Schedule C.)

If the tax is an assessment for a local improvement which tends to increase the value of your property (paving of a sidewalk in front of your house, for example), this amount is not a valid Schedule A deduction either. It may, however, be added to the cost basis for consideration on a later sale.

But if some part or all of the assessment is made to pay for maintenance and repairs, or for interest expense on the original cost of the project, then an income tax deduction is allowed to the extent of either or both of those purposes.

Sound confusing? In my opinion, if your county officials are going to point out this tax distinction to you, then they have a concurrent responsibility to specify in their annual tax statement the applicable amounts that are either deductible or not deductible on your federal tax return.