Sale expenses are expenses associated with the sale of a stock. Typical sale expenses include:
Broker’s commissions
Transfer taxes
Option premiums
Sale expenses reduce the capital gain (or increase the loss) on a sale because you don’t have to pay taxes on money you pay to execute a sale.
Your broker will send you a Form 1099-B, or a substitute statement, reporting the amount you received from the sale. Your 1099-B should also tell you whether or not the amount reported is the net sales price. In most cases, your Form 1099-B will show the net sales price.
If the amount reported is the net sales price, you won’t need to make any adjustments when you report the sale on your tax return. This is because the broker deducted sale expenses from the amount reported.
If your Form 1099-B doesn’t show the net sales price, then you need to adjust the cost of the stock. Adjust the cost by adding to it any sale expenses that you paid.