Investment Expenses-Tax form

Discussion in 'Taxes and Accounting' started by sappjason, Mar 27, 2010.

  1. Hello,
    I'm trying to figure out if I can write off various expenses for my day-trading last year. I had about $3300 in various expenses that were directly related to my day-trading activity (co-location server fees, data feed fees, cell phone fees, etc). How can I (or can I) write these expenses off? Is my only option to use Schedule A line 12 (Investment expenses related to interest and dividend income)? This doesn't even seem to apply, because these were for day-trading related expenses (for short-term capital gains). Any thoughts out there?
    I'm going to ask my accountant on Monday, but I am just anxious to get a complete picture before the weekend is out (if possible).


  2. Surdo


    Standard Deductions
    Single: $5,700
    Head of Household: $8,350
    Married Filing Joint: $11,400
    Married Filing Separately: $5,700

    You need to exceed $5,700 to make it worthwhile to itemize on a Schedule A.

    You could file a schedule C "Profit or Loss from Business". File a NOL if you lost money.

    ***Talk to a CPA!
  3. Schedule A is subjected to a 2% floor. Meaning that any write-offs in Schedule A need to be 2% above your adjust gross income for the write-off to kick in. So if you (+spouse) have other ordinary incomes besides trading, you may not be able to write out those expenses.

    I agree that Schedule C should be better. No 2% floor. Also, you can write off other expenses (if applicable) such as home office expenses, car, etc..

    If you do day trading and treat trading as a business, you should consider using Schedule C. Read up more on it and talk to your accountant.

    Take a look at some of my past posts: