Can I net interest paid on my short-sale positions against income from lending securities?

[fastlapp]

Hello - I trade stocks. I often short securities, for which I pay a borrow fee to the lender. Additionally, my broker lends stocks which I own to other short sellers who pay me interest income. 

I received $10k in income from lending securities, which is reported in a 1099-MISC from my broker. I paid $5k in borrow fees (reported on my 1099 Supplemental Information as "SHORT SALE BORROWING FEES"). 

Can I net the $10k against the $5k? If not, is there any way to deduct the $5k filing as an individual?

[fanfare]

Your borrowing fees were deductible on schedule A if you itemized,

but the TCJA tax change eliminated that deduction. the disallowal sunsets but may be renewed.

[fastlapp]

Pretty ridiculous that it counts as income but not as a deduction. 

[reserve_currency]

Why isn't a short borrow fee considered a cost, like a commission that a broker charges to buy/sell a stock? IRS says cost basis is any cost incurred in the transaction of the the asset.  The IRS would then get their money by taxing the fees that the broker made.

So wouldn't you adjust your cost basis to include the borrow fee and then include Form 8949 to show why you adjusted the cost basis of the stock?

[RobertB4444]

Short Borrow Fees are considered investment counseling fees, not commissions.  And, like @fanfare said, investment counseling fees are no longer deductible under the TCJA.