Tax Question RE: grading fees

lope208

When it comes to capital gains and losses, I know that commissions count towards your overall cost basis when it comes to stocks.
However, do PCGS grading fees count towards the cost basis?

I would think they do, but I'm no expert.

I know I should check with a "qualified" tax professional, so I will not use any info on here as gospel.


Thanks

secondrepublic

I would think any expenses you have in connection with the purchase/sale of the coin would probably be included in the cost basis... grading fees, shipping, PayPal expenses, etc.

ProofCollection

<< <i>I would think any expenses you have in connection with the purchase/sale of the coin would probably be included in the cost basis... grading fees, shipping, PayPal expenses, etc. >>



I concur.

jmski52

It's part of your cost basis for the coin.

I'm not a tax attorney or accountant.

Boom

Agreed. Part of your Basis.

illini420

Isn't it only part of your basis if you haven't previously deducted those expenses elsewhere on your returns. I'm sure many dealers take a deduction for grading fees at the time they are paid vs. adding the fees to cost basis. Not sure if you get to do both. But for us collectors who can't deduct the fees against our ordinary income, I'd say definitely add it to your cost basis.

jmski52

I'm sure many dealers take a deduction for grading fees at the time they are paid vs. adding the fees to cost basis. Not sure if you get to do both.

Grading fees are a cost. Therefore, the simplest way to account for the cost is to add grading fee to the cost of the coin that was graded.

I am unclear about what type of deduction you would take when the grading fees are paid. Deductions are generally taken when the taxes are paid, and a deduction is usually something taken directly off your tax because of a specific tax exemption or allowance, like a mileage expense or a mortgage payment deduction.

A grading fee is only taken off your tax bill indirectly by reducing the profit realized when you sell the coin, and that is done by increasing your cost basis.

I am not a tax attorney or an accountant.

illini420

I was just suggesting that some may take grading fees as business deductions, just as they would take deductions for travel, meals and entertainment, postage, etc.

This only really works if you're in the business of coin dealing though.

dontippet

I've always taken grading fees at the time they were paid. I also deduct ebay fees at the time they are paid. Paypal fees are deducted with the sale of the item since they are billed with individual items. But, as previously mentioned, this is only for dealers.