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From: wildbill@ucbvax.ARPA (William J. Laubenheimer)
Newsgroups: net.invest
Subject: Re: where do i deduct stockbroker expense?
Message-ID: <2936@ucbvax.ARPA>
Date: Wed, 31-Oct-84 02:43:54 EST
Article-I.D.: ucbvax.2936
Posted: Wed Oct 31 02:43:54 1984
Date-Received: Thu, 1-Nov-84 03:12:04 EST
References: <586@ucbtopaz.CC.Berkeley.ARPA>
Organization: University of California at Berkeley
Lines: 38

> 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