Stock Reorganization Fee

Forum|Forum|6 years ago
February 3, 2020
9 replies
98 views

My broker charged a "reorganization fee" in connection with some stock I owned. It wasn't deducted from the sales proceedings of all the stock transactions necessary to achieve the split into 3 different companies.

How do I incorporate that cost into TURBOTAX BUSINESS?

VictorW9

Alumni - Intuit

Investment fees are no longer deductible for 2019. It used to be deductible under schedule A as miscellaneous itemized deduction subject to 2% of AGI limit. However, investment interest expenses are sill deductible.

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Richyrich2Author

Level 2

VicktorW9, Thank you for your answer. I plan on following it and not pursuing deducting the fee. However, I would think that a reorganizational fee could be added to the cost basis of the associated stock, but in my situation it would be much too complicated to do so.

dscek

Level 4

I have the same question about stock reorganization fees. Is it really considered an investment fee or can it be added to the cost basis of the stock? I can't find any definitive answer to what would seem to be a common question. Is there any reputable source that has an answer for this question?

On the 1099-B that I received, it reported a small amount of proceeds due to a merger situation and also reported $0 for the cost basis of this. So the reorganization fee was not applied to the cost basis being reported to the IRS. But the 1099-B also states "You should review this information carefully when completing your Form 8948 and Schedule D. There may be instances where our reporting requirements will not be consistent with your particular tax accounting position or elections. For these reasons, the IRS requires us to provide you with this reminder: Taxpayers are ultimately responsible for the accuracy of their tax returns." So basically, they are saying the amounts on the 1099-B might not be right.