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Allow me to explain Ira's post further for those who would like it (I hope you don't mind, Ira)--

The commission you pay on a stock trade (either a buy or sell) is added to the basis (buy) or subtracted from sale price (sell). Let me demonstrate with your example:

<u>Transaction 1</u>
Buy 10 shares of ABC at $10/share, pay $12 commission.
Total cost = $100 for stock + $12 for commission = $112.
Basis in stock = $112, or $11.20 per share

<u>Transaction 2</u>
Sell 10 shares of ABC purchased in Transaction 1 at $10/share, pay $12 commission
Total sale price = $100 for stock - $12 for commission = $88.
Sale price = $88, or $8.80 per share

<u>Calculation of Gain/Loss</u>
Sale price of $88 ($8.80 per share) - Basis of $112 ($11.20 per share) = LOSS of $24 ($2.40 per share).

Report, as IRA stated, on the appropriate line of Schedule D depending on the term held.

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