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Doing Stocks expense books???

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    Doing Stocks expense books???

    A client has taken the Invest Tools seminar learning how to trade stocks about a couple years ago. He has been buying and selling for almost 2 years and last year did options. He is buying books, going to conferences and even went to the Chicago stock exchange place.

    His full time job does not relate to this line of trading. He is learning and doing it so he can make and do enough to quit his full time job and make this his full time job. He studies and does his homework with the buying and selling the stocks and as mention earlier - buys books and stuff.

    He has short term loss and has had over $30,000 to carry over from prior years but can only write off $3000 a year but wants to write off more and he has heard he can do it by becoming a business. He is talking about forming a partnership with his wife to take the expenses and do health insurance or retirement and not for sure if that will work. Told him - go out and teach what you have learned and that could be your business like hold seminars or classes. But right now - can't quit his full time job to do that. A while back I thought I read where you can expense your computer or office and add to the basis of the stock BUT cannot find it again. Can anyone guide me that he can only write off expenses and make it a business without income. Guess could go on schedule C or do the partnership....

    #2
    I never heard of expensing a computer and adding it to the basis of stock, at least not in IRS literature. You can find anything on the internet. If he had gains, then he might get away with investment expenses to the extent of income (divs/gains) but beware of this guy's approach. It can be viewed as a tax avoidance scheme by the IRS. From the amount of his losses, doesn't sound like he is particularly proficient at it.

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      #3
      ditto on capitalizing cost of a computer. (geez, Louise!) (grin

      But books on investments, how to manuals etc, could be an investment expense on schedule a but probably wouldn't survive the 2% haircut.
      ChEAr$,
      Harlan Lunsford, EA n LA

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