Sale Expenses

Sale expenses reduce the gain, or increase the loss, on a sale.

Typical sale expenses are:

• Broker's commissions
• Transfer taxes
• Option premiums

You can take advantage of sale expenses in one of two ways:

• Increase the basis by the expenses (in which case you report the gross sale price)
• Reduce the sale price by the expenses (and report the net sale price)

If your 1099-B shows the net sale price, you can ignore the sale expenses. The broker has made sure you won't be taxed on an amount you didn't receive by deducting sales expenses from the amount reported.