How to Report a Service Fee on a 1040 Schedule D Form

Schedule D is a familiar form for most investors, but even the savviest capitalists can become confused about exactly what goes where. This is particularly true when trying to determine how to report service fees for transactions such as buying and selling stock and other assets. These fees can be deducted from your total gain and decrease the amount of taxes you owe, so reporting them correctly is a must to avoid paying too much.

Step 1

Download Schedule D and Form 8949 from the IRS website.

Step 2

Determine if the investment is considered long-term or short-term. Long-term investments are held for at least one year, while short-term investments are held for less than a year. If you have a short-term investment, complete Part One of Form 8949 and Schedule D. If you have a long-term investment, complete Part Two.

Step 3

Check one of the three boxes on Form 8949 to indicate whether you received a 1099-B form that reported the value of the investment when you purchased it, also known as the "basis."

Step 4

Enter a description of the investment in column A of line 1. For stocks, this is the issuing company’s stock ticker symbol or name and the number of shares you own.

Step 5

Enter the date you purchased the investment, the date you sold the investment and the price for which you sold it in columns C, D and E.

Step 6

Enter the amount of the service fee in column F.

Step 7

Subtract the fee amount in column F from the sales price in column E. Enter the resulting figure on line 2, column G.

Step 8

Enter the figures from columns E, F and G of Form 8949 on line 1, 2 or 3 of Schedule D. The line you use depends on the box you checked on Form 8949.

Step 9

Add the figures in columns E, F and G, and place the result in column H.

Step 10

Complete Schedule D to report and calculate any additional gains or losses.

About the Author

Lauren Treadwell studied finance at Western Governors University and is an associate of the National Association of Personal Financial Advisors. Treadwell provides content to a number of prominent organizations, including Wise Bread, FindLaw and Discover Financial. As a high school student, she offered financial literacy lessons to fellow students.

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