Investment Expenses-Tax form

[sappjason]

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).

Thanks,

Jason

 

[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!

 

[Bolimomo]

Quote from sappjason:


..... 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?

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:

http://www.google.com/search?hl=en&...limomo+schedule+c&aq=f&aqi=&aql=&oq=&gs_rfai=