I do not believe the expenses are deductible, at least filing for standard deduction. I think it might be different if itemized deduction
Anyways, -none of this is tax advise 🙂 -
If anybody cares:
I found a GBTC tax calculator spreadsheet, which helps and you can see the mechanics of how the weekly 'cost basis factor' is used (which is found on your 1099-B form).
The thing is, the sales proceeds were actually LESS than the proceeds that GBTC took out vs doing my own calculation (doing the GBTC six step tax procedure). It was further off. Even so, I had about a 100-101 dollar capital loss on both calculations. So I am just using the reported 1099-B proceeds and taking the lower cost basis that I calculated between my calculation vs the "tax calculator". It's a loss either way. I am not going to hire an advisor just to go through this and there's no guarantee he'd get it right.
The tax calculator uses the pro-rated proceed expenses (as listed on the GBTC spreadsheet) in accounting for having a share for a portion of a month. However, if you follow the GBTC tax document it shows that accounting for a portion of a month you do (number of days owned/ number of days in the month). This produces a different figure than there monthly pro-rated expense number (which varies every week and doesn't match (days owned/days in month). So that might explain why I can't seem to get an exact cumulative proceeds match.
Here's a link to the GBTC calculator. You can input the sale date as 12/31/2021 for your transaction/tax lot, even though you may not have sold it. You'll see the weekly schedule of expenses.
https://support.wealthfront.com/hc/en-us/articles/[phone number removed]2-How-do-I-report-taxes-for-...
::The URL is being parsed--due to it thinking it's a phone #. Search "GBTC tax calculator Wealthfront" on Google
Here's how the cost basis factor comes into play
Each Tax Lot:
cost basis (full purchase price for tax lot) * weekly cost basis factor (found on your 1099-B form) = Cost basis
You will need to make those calculations for the duration you owned the lot/stock in the year and add them up. The tax calculator helps you do this and it will make sense.
For the life of me I could never even get my first few tax lots (made within the first week) to equal the amount of proceeds they took the first week on my 1099-B.
I initially bought GBTC for the convenience, making it easy to do taxes and not worry about keeping track of cost basis/transaction dates of BTC. I had no idea about the tax implications of owning the stock--that is for tax reasons you are responsible for assessing the basis on when they sell the underlying asset (for mgmt expense). How convenient for them.
Hope that helps.
