Investment Expenses

[susieq]

Two brothers - both clients - have some joint investment accounts. #1 works for a title company, #2 is retired.. They spent almost $12,000 for Investools Investor Education Program. They signed up, went to a workshop out of town and spent $10,000 of that on a class called Investools Advanced Options.

My question is can this be deducted?
1) Investment expense
2) Lifetime learning credit
3) any other acceptable categories

or not at all.

What do you think ?

[Roland Slugg]

No. Investment expenses must be ordinary and necessary and related to the production or collection of income or management of investments. (Code §212(1) and 212(2)) More specifically, expenses of a convention, seminar or similar meeting aren't deductible as nonbusiness (investment) expenses. (Code §274(h)(7)) See also IRS Pub. 550, p.36.

The expenses don't qualify for the Lifetime Learning credit either. For that credit the tuition must be paid to an educational institution eligible to participate in the federal student loan program.

If they were deductible, I'm sure the seminar's sponsor would have made that claim in the advertising materials and at the class itself.