I think I can subtract trading fees from gross proceeds when calculating net proceeds on Form 8949, but can I also subtract transfer (deposit/withdrawal) fees?
For example, let's say:
- Deposit: I send ₿1 from my hardware wallet to my account on a cryptocurrency exchange (my crypto account). As a result ₿1 is withdrawn from my hardware wallet, but since the bitcoin network charges me a transaction fee of ₿0.0005, only ₿0.9995 is deposited into my crypto account. Since the fair market value (FMV) of ₿1 at the time of the transaction is $10,000, the FMV of the bitcoin transaction fee is $5.
- Trade: Using my crypto account I sell ₿0.9995 for $9,995, but the cryptocurrency exchange charges me a trading fee of $10, leaving me with $9,985 in my crypto account.
- Withdrawal: A few days later I withdraw the $9,985 from my crypto account to my bank account, but the cryptocurrency exchange charges me a withdrawal fee of $7, depositing only $9,978 into my bank account.
What should I put on Form 8949 for the net proceeds of the sale of my ₿1?
Similarly, can I add transfer fees to the cost basis of a purchase?
