When Buying Securities …
Whether you use a full service or a discount brokerage firm for your trading activity, include commissions paid on your purchases. This will give you accurate costs per share on your Inventory, both for general knowledge, and to calculate accurate Profit/Loss for tax purposes..
Example: If 10,000 shares have been purchased at a price of $0.10 per share and commissions are $100, your accurate cost is $0.11 per share.
When Selling Securities …
Commissions on sales are tax deductible.
To calculate accurate profit/loss when selling stock, use the net amount of the sale as your selling price. Alternatively, use the gross amount but record the commission separately as this amount is tax deductible.
Example: If 10,000 shares were sold at $0.20 per share equalling $2,000 and your account has been credited $1,800, your sale price is $0.18. Alternatively, record the sale at $.20 and record the $200 commission separately as a deductible expense.
This information is provided as an information service only and is not intended to substitute for competent professional advice. No action should be initiated without consulting a professional advisor.