Investment expenses for non traders

Discussion in 'Professional Trading' started by trader333, Dec 16, 2002.

  1. I am a full time self employed and do daytrading during my holidays and time offs which is around 8 to 10 weeks a year. I do not claim a trader status. I am wondering if somebody can help me to answer these two questions.
    (1) can I deduct cost of books, monthly magazines and trading softwares under misc deductions. These two items have improved my investment income.
    (2) I lost money in 2000 and 2001, but I am positive this year, can I take this profit against losses for previous two years.

    I appreciate any help and comments.
  2. no
  3. BlueStar


    If your corp buys the books isn't it an expense.
    Therefore the tax benefit? Thats probably ok?
    Are seminar's deductable for an individual?
  4. 1) Yes.

    2) Not sure, but don't think so ...
  5. Any expenses (e.g. books) must be "ordinary and necessary" in order to be deductible. Further, if the books have a useful life in excess of one year, then (assuming they're deductible), they must either be depreciated per I.R.C. §167(a) or expensed per §179.

    Deducting expenses for attending "investment seminars" is generally prohibited by I.R.C. §274(h)(7).
  6. What is ordinary and necessary for me may not be the same for others, therefor I think if I trade via a software which I own and is still good even after a year should be deductible. I may be wrong. These irs deductions are always confusing to me.
  7. cheeks


    I promise you are not alone on this!
  8. as an investor almost nothing is deductable.
  9. nitro



    Are you in Chicago?

  10. Actually, a whole bunch of stuff is deductible. What is problematic for "investors" is the 2% AGI floor that applies to miscellaneous itemized deductions. "Traders" don't encounter the floor since they report their expenses on Sch C.
    #10     Dec 27, 2002