Are wire transfer fees charged by the broker for proceeds from a stock option sale tax deductible?

Forum|Forum|6 years ago
June 5, 2019
2 replies
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The broker charges a $25 wire transfer fee. Is that tax deductible?

TurboTax Home & Biz Windows

Best answer by KarenJ2

Yes, the wire transfer fee charges reduced your net gain on the sale, so they should be deducted from the sales proceeds.

KarenJ2Answer

Yes, the wire transfer fee charges reduced your net gain on the sale, so they should be deducted from the sales proceeds.

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ssharptxAuthor

I found this in Turbotax. The writers of Turbotax support TurboTaxKaren.

Sales Expenses Not Reported by Your Broker

This includes any expenses you paid on the sale that are not already subtracted from your net proceeds (Box 1d) or added to your basis (Box 1e) and listed on Form 1099-B or substitute broker's statement. (This is not common.)

Examples of items to include here:
- Wire transfer fees
- Phone or Fax fees
- Express delivery fees

TomYoung

Employee

I'd probably say "No." Once the proceeds from the sale are deposited in your brokerage account, you have constructive receipt of that amount. How that cash gets out of the account and to you is a completely separate transaction, not connected to the actual sale. You could have, I'd guess, asked the broker to send you a check which they'd probably do for free, though you'd have to wait a few days for the check to arrive and then deposit that check in your bank account.

I don't think the 1099-B you get, reporting the proceeds of the sale, is going to reflect that $25 fee.

Tom Young

mjohnellis

I agree with this comment. For years I have had wire fees associated with maturing CD's and have never found a way to deduct them short of ignoring IRS rules. Unfortunately the IRS does not provide a specific example showing you cannot deduct wire fees, but they have some examples that would cover investment expenses. it becomes clear that these fees ( for an individual) are not deductible. You will never find a 1099-int that will show these fees unless it is classified as a early withdrawal penalty or just deducted from the interest. I have never seen that happen on a 1099-int. I wish this would be put to bed once and for all.

Critter-3

If this was a direct part of the cost of sale of the stock then the wire fees should be added to the cost basis and reduce the profits on that sale. If this was a separate fee charged by the broker it should be added into the brokers fees to be deducted as investment expenses on the Sch A when they are allowed again in 2026.