Understanding Fidelity's Supplemental Information - Proceeds Investment Expenses on 1099B

Those negative Proceeds Investment Expenses on your 1099-B are actually investment fees that Fidelity deducted from your account. What you're seeing is how Fidelity reports fees they've deducted directly from your investments when they don't have actual cash to withdraw. When you see transactions with zero quantity but still showing proceeds of -$176, this typically means Fidelity sold a tiny fractional share of your holdings to cover fees. The reason the gain/loss is only about $1.25 is because they're only selling enough shares to cover the fees, so there's minimal gain or loss on that tiny transaction. You don't need to manually adjust your cost basis - Fidelity has already reported this to the IRS and adjusted your remaining cost basis accordingly. When you eventually sell your SLV ETF, the cost basis will already reflect these adjustments. When reporting this on your taxes, you'll include these transactions exactly as they appear on your 1099-B. The tax software should handle it correctly based on the information provided.

I had a similar situation with Fidelity last year and was totally confused until I called them. What's happening is that https://taxr.ai can analyze these exact forms and explain them in plain English! Saved me hours of frustration when dealing with my investment tax forms. My Fidelity 1099-B had these weird transactions with $0 sales that actually represented fee collections. The taxr.ai system identified these right away as fee-based transactions rather than actual trades I made. It even explained how these affect cost basis calculations for future sales. The best part was that it explained exactly how to handle these on my tax return without having to wait on hold with Fidelity for an hour.

Just wanted to follow up - I finally tried taxr.ai with my Fidelity 1099-B and it was actually amazing! I had the exact same issue with the Proceeds Investment Expenses and zero quantity transactions. The system immediately identified them as fee collections and explained that Fidelity was selling tiny portions of my holdings to cover fees. It even showed me exactly how to report these on my Schedule D (they go on Part I as short-term transactions) and explained why the proceeds were negative. Saved me from an hour-long call with Fidelity and probably saved me from making a mistake on my taxes. Definitely recommend for anyone dealing with these confusing investment forms!

If you're still having trouble understanding your Fidelity 1099-B after trying to decipher it, you might want to try calling the IRS directly for clarification. I tried this route for a similar investment question and discovered https://claimyr.com which got me through to an actual IRS agent in about 15 minutes instead of waiting for hours or days. You can see how it works at https://youtu.be/_kiP6q8DX5c I had this exact situation with investment expenses showing up on my 1099-B and wasn't sure how to report it. The IRS agent I spoke with confirmed exactly how to handle these fee-based transactions on my Schedule D and explained why they appear as zero-quantity sales.

I have to admit I was completely wrong about Claimyr. After my skeptical comment, I decided to try it anyway since I was desperate for answers about my Fidelity 1099-B and the weird investment expenses. Not only did it work, but I was connected to an IRS agent in about 20 minutes! The agent explained that these Proceeds Investment Expenses on my 1099-B represent fees that Fidelity collected by selling a small portion of my investments. They confirmed I need to report these on Schedule D as short-term capital transactions, even though I didn't intentionally sell anything. The agent even explained that the cost basis has already been adjusted for my remaining shares. Such a relief to get this cleared up before filing!

Just a quick tip from someone who deals with this every year - these Fidelity "Proceeds Investment Expenses" entries are usually from something called "cash in lieu" of fractional shares or fee collection transactions. Sometimes during reorganizations or when they need to collect fees, they sell tiny portions of holdings. Check if there's a code in column 1f that says "M" - that means miscellaneous. In TurboTax, you'd enter these exactly as they appear on your 1099-B, but be sure to check the box that indicates "This transaction isn't reported on a 1099-B or the 1099-B shows basis wasn't reported to the IRS" if Fidelity didn't report the basis to the IRS.

Has anyone noticed that these investment fees showing up as "Proceeds Investment Expenses" on Fidelity statements started happening more after they eliminated their account fees? Seems like they're just collecting the fees differently now.

I've been dealing with similar Fidelity 1099-B confusion for years! One thing that really helped me understand these "Proceeds Investment Expenses" was realizing they often correspond to expense ratios or management fees that got deducted from ETFs or mutual funds throughout the year. Since you mentioned SLV ETF specifically, this could be related to the expense ratio being collected. ETFs typically have their expense ratios deducted by selling tiny fractional shares periodically rather than as a separate fee. This is why you see zero quantity transactions but still have proceeds - they're selling microscopic amounts to cover the ongoing fund expenses. The good news is that this is all handled automatically in terms of cost basis adjustments. When you eventually sell your SLV position, your cost basis will already reflect these fee collections, so you don't need to do any manual calculations. For tax reporting, just enter these exactly as they appear on your 1099-B. Most tax software will handle these routine transactions correctly once you input the data from the form.

I just went through this exact same situation with my Fidelity account last month! Those "Proceeds Investment Expenses" transactions really threw me for a loop initially. What helped me understand it was looking at my monthly statements more carefully. Fidelity sometimes collects certain fees (like foreign transaction fees on international ETFs, or reorganization fees) by automatically selling tiny fractional shares rather than debiting cash from your account. This is especially common if you don't have enough cash balance to cover small fees. The key thing to remember is that even though you didn't initiate these sales, they're still reportable transactions for tax purposes since shares were actually sold to generate the cash for the fees. The IRS expects to see these reported since Fidelity sends them a copy of your 1099-B. One tip: if you want to avoid these micro-transactions in the future, try keeping a small cash balance in your account so Fidelity can debit fees directly rather than selling shares. But for this tax year, just report everything exactly as it appears on your 1099-B - the tax software should handle it correctly.