I want to thank you again for your time. However I've found the answer to my question in a few Tax Court precedents, that state commissions are in fact to be included as part of the cost-basis:
i'll point you to 2 documents:
IRS memo XXXXXXXXX - page 7 (not IRC law, just opinion from Chief of Branch 5:
"Preliminarily, commissions on the purchase and sale of the currency products are not deductible regardless of whether Taxpayer was a trader in the currency products. Rather, the purchase commissions increase the basis of the contracts; unless Taxpayer was a dealer in the currency products, sales commissions reduce the selling price of the contracts. See Covington v. Commissioner, 120 F.2d 768 (5th Cir. 1941), cert. denied, 315 U.S. 822 (1942); cf. § 1.263(a)-2(e) (commissions on
the purchase and sale of securities)."
COMMISSIONER OF INTERNAL REVENUE v. COVINGTON
120 F.2d 768 (1941)
The regulations of the Treasury Department have consistently provided, that deductions for commissions paid in the purchase and sale of securities by one who is not a dealer, are not deductible as business expenses, that commissions paid on purchases shall constitute a part of the cost of the securities, and commissions paid on sales shall be deducted from the selling price. The courts have applied a similar rule to commissions paid on purchases and sales of property other than securities. It is true that in Article 282, of Treasury Regulation 77, there was inserted the words hereinafter set out in italics: "Commissions paid in selling securities, [ 120 F.2d 771 ]
when such commissions are not an ordinary and necessary business expense, are an offset against the selling price.* * *"
But it is also true that it has been uniformly held that this exception applies only to dealers in securities and that this provision was made and applied where the details of accounting in the dealer's business made it impractical for him to match his selling commissions against each individual sale.
1. Commissioner vs Covington ruled commissions should be included as a part of cost-basis for buying and selling securities (since they don't qualify as a business expense [since i'm not a business or in business]).
2. These commissions would be included in my cost-basis.
3. Since IRS has allowed FX gains/losses to be reported on line 21 of form 1040 as ordinary income/losses under IRC 988, commissions would be included on any line 21 calculations.