Can I deduct the broker’s fees from stock profits when I file my taxes? Do I simply subtract the broker’s fees from the gross profit? Thanks.
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The IRS allows brokerage fees to be deducted as miscellaneous itemized deductions on Schedule A.
If you have nontaxable investments in your portfolio, such as municipal bonds, the portion of the broker’s fees that relates to these investments is not deductible.
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If the fees are charged by transaction, you add them to the basis.
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Another poster gave a good cite but offered the wrong conclusion. Broker fees adjust the cost basis only, and only get deducted from the proceeds of the security when sold. They do not get deducted as an itemized deduction.
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Everybody is half correct here. Annual brokerage fees such as account maintenance fees go on Schedue A. Per transaction commissions are added to the basis on purchases and reduce the net proceeds on sales.
The broker’s fee for the purchase is included in your basis on schedule D. The brokers fee for the sale is probably deducted from your sale price on the 1099-B – if it isn’t, you’d add that to the basis also.
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You may, but you have to keep detailed records. Oftentimes, the commission and even the .003 per cent SEC fee is figured in to the final proceeds. So check it and make sure you are not deducting it twice. You really should keep a notebook like investors did in the old days. You shouldn’t depend upon your online statement only.