cnrdean@ucbtopaz.CC.Berkeley.ARPA (10/27/84)
This is the first year I have ever bought stocks in the NYSE. Excuuuuuuuse my ignorance; but where do I deduct my stockbroker expense? My guess is that if I itemize on my 1040, this is the place where I would deduct. But what if I don't itemize? Or do I deduct the purchase and selling stockbroker expense at the time that I sell a stock? I would ask my stock broker, but "my stock broker is C. Schwab. And C. Schwab says 'we don't give advice'". Thanks
jhs@druri.UUCP (10/30/84)
>>Subject: where do i deduct stockbroker expense? >>Message-ID: <586@ucbtopaz.CC.Berkeley.ARPA> >>Date: Fri, 26-Oct-84 19:40:44 MST >>This is the first year I have ever bought stocks in the NYSE. >> >>Excuuuuuuuse my ignorance; but where do I deduct my stockbroker >>expense? >> >>My guess is that if I itemize on my 1040, this is the >>place where I would deduct. But what if I don't itemize? >> >>Or do I deduct the purchase and selling stockbroker expense >>at the time that I sell a stock? First, itemizing is a moot point in most cases: if you have capital gains, you must declare them (itemize); if you have capital losses, you don't have to itemize, but you're pitching money into a black hole if you don't. Second, when you have a gain, you deduct brokers' commission fees as an expense and show the net (long or short term) capital gain. If you have a net capital loss, tough noogies--no deduction; fees are deductible only when determining net gain. If any gurus out there take exception to this, please post a followup (and I'll starting filling out 1040Xs!!). --Jeff Shore (..ihnp4!drutx!druri!jhs)
wildbill@ucbvax.ARPA (William J. Laubenheimer) (10/31/84)
> Excuuuuuuuse my ignorance; but where do I deduct my stockbroker > expense? > My guess is that if I itemize on my 1040, this is the > place where I would deduct. But what if I don't itemize? Nope. > Or do I deduct the purchase and selling stockbroker expense > at the time that I sell a stock? This is closer to the truth. Profits or losses from stock transactions are reported on Schedule D, "Capital Gains". Capital gains cover just about any form of assets that you can buy and sell, as opposed to money which you loan to a bank or money fund. The basic rule defines capital gain to be the difference between what you sold the asset for and what you paid to acquire and control it. This latter figure is called the "cost basis". In the case of a stock, the cost basis is the price paid for the stock plus the cost of buying it plus the cost of selling it. To take a typical example: Buy 100 shares of XYZ at 15 = $1500 + commission of $45 Sell XYZ at 25 = $2500 - commission of $60 Cost basis is 1500+45+60 = $1605 Capital gain = $ 895 There are a few other things you need to know. If you don't already, make sure you get the thick Form 1040 package with all the forms, check the publication list for those that might apply, and read those too. Or get one of those handy-dandy tax guides that come out each year. There should be a section in there which describes some of the other catches (too numerous to go into here) you can run afoul of. Bill Laubenheimer ----------------------------------------UC-Berkeley Computer Science ...Killjoy went that-a-way---> ucbvax!wildbill