I transferred some Nokia shares from a brokerage in Europe to my broker in US (like an ESPP). There was a 20 Euro transfer fee. The broker in EU sold some of my shares to pay for the 20 Euro transfer fee. A couple of weeks a go, I received a 1099B for the shares sold, the cost basis was shown as 0, and the Net Proceeds Reported to IRS (Box 6) had an X instead of an amount.
Questions:
Thanks!
I will try to answer your questions in the order posed. First, regarding Box 6. Box 6 is only an informational box reporting on the 1099B to the IRS as to whether the amount reported to the IRS was the Gross proceeds or the Net proceeds. Copy of 1099B below.
The transfer fee can be added to the cost basis of the sale or as an expense of sale to reduce the sales proceeds.
You can, when entering the capital transaction, adjust the cost basis through the steps highlighted below to enter the changes you need to make.
The cash transfer fee, if it was part of the sales transaction, can be stated to be part of the sales expenses.
The screen below shows where you can adjust the basis of the capital item sold, the numbers are for example purposes only:
I will try to answer your questions in the order posed. First, regarding Box 6. Box 6 is only an informational box reporting on the 1099B to the IRS as to whether the amount reported to the IRS was the Gross proceeds or the Net proceeds. Copy of 1099B below.
The transfer fee can be added to the cost basis of the sale or as an expense of sale to reduce the sales proceeds.
You can, when entering the capital transaction, adjust the cost basis through the steps highlighted below to enter the changes you need to make.
The cash transfer fee, if it was part of the sales transaction, can be stated to be part of the sales expenses.
The screen below shows where you can adjust the basis of the capital item sold, the numbers are for example purposes only:
Thank you @JosephS1 !
Just a couple of questions:
1. Do I mark form 7979 as CORRECTED? I assume yes, since I will need to make corrections.
2. I don't think that the "transfer fee" posted by my bank when receiving the money from the foreign bank broker can be claimed as part of the sale. Is there another way to claim bank transfer fees or even other bank fees like not keeping enough money in a checking account?
Thanks again for the details and your quick response!
No, you enter the 1099-B as issued, then make yourown adjustments, so no need to mark the 1099-B as 'Corrected'. This refers to if you received a corrected 1099-B from the broker.
The transfer fee is a legitimate adjustment to the Sales Proceeds. The fee adjusted the amount the amount you actually received (if different than what is reported on 1099-B).
Unless you have a Business of some type, bank fees are not deductible.