Is brokerage commission deductible?

Discussion in 'Professional Trading' started by vrodtrader, Jan 15, 2004.

  1. Hello,

    Can anyone please answer my question regarding brokerage commission. Is it deductible since fees are part of trading expenses?



  3. I'm not an accountant, a lawyer, or anything else that has authority to answer this question, but... commissions are simply subtracted from the profit of the sale. If you made $100 on a trade and paid $5 in commissions to get in and $5 to get out. You just report $90 as your capital gain. You don't count them as an itemized expense to write off. You can always call the IRS to confirm.
  4. Phoenix Rising is right on with his answer. Commissions paid on the purchase of securities are not deductible; rather they are added to your basis. Commissions at the time of sale are an offset against the selling price.

    So after these various adjustments and offsets are made, the sales proceeds are effectively reduced and the taxable gain is effectively reduced by the amount of commissions paid.
  5. Thanks for the answer...