safe

[DixieEA]

Hi fellow tax professionals, at this point in the tax season my mind is not as sharp. I
know I am suppose to know this, but can a taxpayer deduct a safe as misc deduction
on sch A as an investment expense if used for financial documents etc. ?

Thanks, and good luck the rest of the tax season.
DixieEA

[MAW TAX]

Yeh....I think so...

It seems if you can deduct safe deposit box rental you should be able to deduct a safe but I think you might need to depreciate it.

Thanks. I'm going to start asking that question.

Have a good season
MAW

[ChEAr$]

The answer

Hi fellow tax professionals, at this point in the tax season my mind is not as sharp. I
know I am suppose to know this, but can a taxpayer deduct a safe as misc deduction
on sch A as an investment expense if used for financial documents etc. ?

Thanks, and good luck the rest of the tax season.
DixieEA

is "yes". Been there, done that for a client.

[erchess]

Harlan two questions

1. Did you expense the safe or depreciate it?

2. How did you deal with the possibility that the safe might at some point be used for non deductible purposes? My own safe contains investment related property but it also contains items that are clearly not investment property such as jewelry I would never sell, birth and death certificates, and old correspondence.

[ChEAr$]

answers

1. Did you expense the safe or depreciate it?

2. How did you deal with the possibility that the safe might at some point be used for non deductible purposes? My own safe contains investment related property but it also contains items that are clearly not investment property such as jewelry I would never sell, birth and death certificates, and old correspondence.

1. Whole cost, about $300 was written off; no big deal.

2. I don't worry about this atall. This is not a matter that IRS even upon audit is going to
make an issue of.

Just as long as i'm satisfied client uses safe predominantly to store stocks and bonds,
maybe a coin collection, is sufficient.

[taxea]

Now I understand your login name

Chear can you give me a site resource for taking the safe. I would be concerned that it is also being used for personal items and would at least have to be allocated if it can be taken at all. taxea

[DixieEA]

IRS letter ruling

erchess, I have done a little research and found this. IRS letter Ruling 8218037, held the
cost of a safe(including installation expenses) used to store securities and other financial
instruments(acquired fo the production of taxable income) is capital expenditure and may
not be deducted in the yr of acquisition. The cost may be recovered through depreciation
only if the taxpayer itemizes deductions. Such depreciation is deductible as a misc
deduction, subject to the 2% of AGI limitation. No decuction is allowed to the extent the
safe is used to store jewelry and other personal effects.

DixieEA

[Larmil]

erchess, I have done a little research and found this. IRS letter Ruling 8218037, held the
cost of a safe(including installation expenses) used to store securities and other financial
instruments(acquired fo the production of taxable income) is capital expenditure and may
not be deducted in the yr of acquisition. The cost may be recovered through depreciation
only if the taxpayer itemizes deductions. Such depreciation is deductible as a misc
deduction, subject to the 2% of AGI limitation. No decuction is allowed to the extent the
safe is used to store jewelry and other personal effects.

DixieEA

Sounds like your best bet is Sec. 179.

[ChEAr$]

Good catch there

Larmil. Section179 it is.

I did notice that the private letter ruling referred to above has the number "82" in it.
I'm not sure, but that may refer to 1982. At any rate, it was a private letter ruling
and applicable to the person requesting it.

And to clarify the client deduction for the safe was way back when, probably before
1982 anyway.

[Gene V]

I think it's gong to be on a individual bases, no clear cut answer,

In J.K. Lasser's book, under Investment Expense deduction:

Safe-deposit box rental fee or home safe to hold your securities, unless
used to hold personal effects or tax-exempt securities.

They also mention Ltr 8218077