Conversion Expense Deductibility?

I receive periodic payments from some UK Annuities.

There's a 1% conversion charge levied for the conversion of each payment from pounds to dollars.

Because of that charge - the full amount of the income which I report to the IRS on my 1040 - is never actually received by me.

I do itemize deductions.
Can anyone advise as to whether the 1% conversion charge can be listed as a deductible investment expense?

The IRS does not have an official exchange rate. A reasonable person could argue that you are in fact receiving a lower exchange rate as a result of your currency conversion charges, and that you should therefore report as income the final amount of $ you receive net of all such charges. This approach avoids the need to take a deduction. Other approaches are certainly possible.

The IRS view since November 2011 is that a taxpayer can use the rate they would obtain if he or she converted cash. That is what you are doing, so you report what you receive.

The IRS view since November 2011 is that a taxpayer can use the rate they would obtain if he or she converted cash. That is what you doing, so you report what you receive.

That seems perfectly sensible.  The annuity pays out each month and arrives in $ in the recipient's US bank so this is what is taxable.