I'm a new trader getting ready for my first tax year of having to record trades on Schedule D. My question is: Can commissions from BOTH the purchase AND the sale of a stock be added to the cost basis? Most of what I read says that cost basis is the amount of the purchase plus any expenses related to the purchase (like commissions), but I can't find anything that says that commissions from the sale can also be added to the cost basis. One person I talked to said that "yes" commissions from the sale can also be added because otherwise you would be taxed twice on that money. Any idea what this means?
http://search.irs.gov/web/query.htm...qc=&qm=0&rf=0&oq=&qt=d&search.x=16&search.y=9 Depends on what your Form 1099-B says (your broker sends that form to you) but the schedule d instructions for 2006 say both buy and sell commissions are deductible in some instances.
File the net amount of the PURCHASE and SALE, which includes the commission/SEC fees to confuse you even more, on your Schedule D. They are NOT deductible since they are already included in your basis and you would be deducting them 2X!