@davidcjonesvt I don't know. I thought I had this figured out and now my head is spinning again. Your statement, "...but they are not sales expenses (eg, so the checkbox doesn't apply). That is, they are not expenses related to the sale of the asset" makes a lot of sense to me when I really think about what you are saying. Sometimes the simplest explanation is the best.
I was relying on the GBTC Letter in paragraph 2 that states, "Instead, the Trust's income and expenses 'flow through' to the Shareholders", and paragraph 3 that states, "Shareholders generally will be treated, for U.S. federal income tax purposes, as if they directly owned a pro rata share of the underlying assets held in the Trust. Shareholders also will be treated as if they directly received their respective pro rata shares of the Trust’s income and proceeds, and directly incurred their pro rata share of the Trust’s expenses."
But your statement makes those points moot, I think.
So if you go back to Page 2 of this thread and read Employee Tax Expert DawnC's post about the Common Adjustments, can I assume that you completely disagree with her post?
It is maddening that there isn't a clear definitive answer to this question anywhere. The answer should be clearly spelled out in the Grayscale letter but no one wants to be seen as giving tax advice. I'm selling all my GBTC at the end of the year (hopefully after the SEC does the right thing and approves the ETF and the discount to NAV goes away), and I hope to never think about GBTC again after next tax season.
