wjm@whuxl.UUCP (MITCHELL) (10/30/84)
Brokerage commissions are not directly deducted from your income tax. Instead, they are added to your cost basis for the securities which either decreases your gain or increases your loss when you sell said securities. Example: You bought 100 shares of stock at $20 and paid $100 commission. Now your cost basis for the stock is $2100 ($2000 for the stock plus the commission). You sell the stock for $30 per share and pay a $125 commission. Now the selling commission is added to the basis, which is now $2225 and the capital gain you report on Schedule D of your Form 1040 is $3000 - 2225 or $775. BTW, a similar procedure applies to sales charges on load mutual funds and you can add the cost of selling any item (e.g. a classified newspaper ad) to its cost basis for tax purposes. Regards, Bill Mitchell (send mail to ihnp4!lcuxc!wjm)