Go to Jeff Salisbury LWGate Home Page.From: "Gene Ricci" <genr@swbell.net>
Subject: [CANSLIM] Deduction Subject to 2% Limit
Date: Tue, 15 Jul 2003 10:35:04 -0500
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This is a multi-part message in MIME format. - ------=_NextPart_000_000C_01C34ABC.C0D35BD0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Sorry folks, but is the money we spend on IBD and/or breakoutwatch.com, = etc, etc, etc deductible against the capital gains for purposes of = calculating the capital gains taxes? Mike Baudino - -------------------------------------------------------------------------= - --------------- Mike, see the paragraphs relating to Investment-Related Expenses below. = Take note of my highlighted areas. Make sure that your expenses apply to = generating taxable income. The IRS may ask you to show proof of your = trading activity if your Schedule D has only a few entries. Based on = personal experience (2 audits passed), if you keep receipts and a = trading log you'll not have a problem .... I didn't. Check out this info: http://www.irs.gov/pub/irs-pdf/p529.pdf Gene Deduction Subject to 2% Limit Although the range of acceptable miscellaneous expenses is broad, it's = tough to cash in. Most miscellaneous expenses are deductible only to the = extent their combined cost exceeds 2% of your adjusted gross income. Qualifying costs fall in three basic categories: Employee Business Expenses Investment-Related Expenses Tax-Related Expenses Investment-Related Expenses Money you spend in the pursuit of taxable investment income qualifies as = a deductible miscellaneous expense, including the following costs: a.. Custodial fees for your individual retirement account. b.. Rental of a safe-deposit box used to store taxable securities. c.. Investment counselor or management fees. d.. The cost of subscriptions to investment-advisory newsletters. e.. The cost of books and magazines you buy for investment advice. f.. The cost of computer software or on-line services to track your = investments. g.. The cost of travel to see your broker to check on your portfolio = or to buy or sell investments. h.. State and local transfer taxes on the sale of securities. i.. Fees paid to a broker or other agent to collect bond interest or = stock dividends. (Unlike commissions paid to brokers on the purchase of = stock-a cost which is added to basis-this type of fee is deductible.) j.. Cost of travel to see your broker to discuss investments. (This = does not include simply dropping by the broker's office to check on the = general condition of the market or to watch the ticker tape.) If you = drive your own car, you can deduct the actual cost or the IRS standard = rate, which is 36.5 cents a mile for 2002. Whether you use the actual = cost or standard rate, add what you paid for parking or tolls. There is no uncertainty about one kind of investment expense that used = to be deductible: The cost of attending an investment convention, = seminar or similar meeting. Such write-offs are now forbidden. If you use a computer to analyze or track your investments, you may = include in your miscellaneous expenses an amount for depreciation as long as you keep careful records that break down the amount of time you use the = machine for investment versus personal purposes. The depreciation deduction is = sure to be modest. If you have a $3,000 computer that you use 20% of the time on your investments, for example, the first-year depreciation deduction would be just $60. The first-year write-off for a computer not used more than = half the time for business is 10% of the qualifying cost. In this example, = the qualifying cost is $600 (20% of $3,000). That's not much, but every = dollar counts when you're trying to scale the 2% cliff between you and any miscellaneous deductions. - ------=_NextPart_000_000C_01C34ABC.C0D35BD0 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable <!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> <HTML><HEAD> <META http-equiv=3DContent-Type content=3D"text/html; = charset=3Diso-8859-1"> <META content=3D"MSHTML 6.00.2800.1106" name=3DGENERATOR> <STYLE></STYLE> </HEAD> <BODY bgColor=3D#ffffff> <DIV><FONT face=3D"Comic Sans MS"></FONT><BR></DIV> <DIV>Sorry folks, but is the money we spend on IBD and/or = breakoutwatch.com,=20 etc, etc, etc deductible against the capital gains for purposes of = calculating=20 the capital gains taxes? Mike Baudino</DIV> <DIV>--------------------------------------------------------------------= - --------------------</DIV> <DIV><BR><FONT face=3D"Comic Sans MS">Mike, see the paragraphs relating = to=20 Investment-Related Expenses below. Take note of my highlighted areas. = Make sure=20 that your expenses apply to <U><STRONG><FONT color=3D#ff0000>generating = taxable=20 income.</FONT></STRONG></U> The IRS may ask you to show proof of your = trading=20 activity if your Schedule D has only a few entries. Based on = personal=20 experience (2 audits passed), if you keep receipts and a trading = log you'll=20 not have a problem .... I didn't.</FONT></DIV> <DIV><FONT face=3D"Comic Sans MS"></FONT> </DIV> <DIV><FONT face=3D"Comic Sans MS">Check out this info: <A=20 href=3D"http://www.irs.gov/pub/irs-pdf/p529.pdf">http://www.irs.gov/pub/i= rs-pdf/p529.pdf</A></FONT></DIV> <DIV><FONT face=3D"Comic Sans MS"></FONT> </DIV> <DIV><FONT face=3D"Comic Sans MS">Gene</FONT></DIV><FONT=20 face=3D"Comic Sans MS"></FONT><FONT face=3D"Comic Sans MS"></FONT> <DIV><BR><BR><U>Deduction Subject to 2% Limit</U></DIV> <DIV><U></U><BR>Although the range of acceptable miscellaneous expenses = is=20 broad, it's tough to cash in. Most miscellaneous expenses are deductible = only to=20 the extent their combined cost exceeds 2% of your adjusted gross=20 income.<BR><BR>Qualifying costs fall in three basic = categories:<BR><BR> =20 Employee Business Expenses<BR> Investment-Related = Expenses<BR> =20 Tax-Related Expenses</DIV> <DIV><FONT face=3D"Comic Sans MS"></FONT><BR>Investment-Related = Expenses</DIV> <DIV><BR><FONT color=3D#ff0000 size=3D5>Money you spend in the pursuit = of <U>taxable=20 investment income</U> qualifies as a deductible miscellaneous expense, = including=20 the following costs:<BR></FONT><BR> a.. Custodial fees for your = individual=20 retirement account.<BR> b.. Rental of a safe-deposit box used to = store=20 taxable securities.<BR> c.. Investment counselor or management=20 fees.<BR> d.. The cost of subscriptions to investment-advisory=20 newsletters.<BR> e.. The cost of books and magazines you buy for=20 investment advice.<BR> f.. The cost of computer software or = on-line=20 services to track your investments.<BR> g.. The cost of travel to = see your=20 broker to check on your portfolio or to buy or sell = investments.<BR> h..=20 State and local transfer taxes on the sale of securities.<BR> i.. = Fees=20 paid to a broker or other agent to collect bond interest or stock = dividends.=20 (Unlike commissions paid to brokers on the purchase of stock-a cost = which is=20 added to basis-this type of fee is deductible.)<BR> j.. Cost of = travel to=20 see your broker to discuss investments. (This does not include simply = dropping=20 by the broker's office to check on the general condition of the market = or to=20 watch the ticker tape.) If you drive your own car, you can deduct the = actual=20 cost or the IRS standard rate, which is 36.5 cents a mile for 2002. = Whether you=20 use the actual cost or standard rate, add what you paid for parking or=20 tolls.</DIV> <DIV><BR><STRONG><FONT color=3D#ff0000 size=3D4>There is no uncertainty = about one=20 kind of investment expense that used to be deductible: The cost of = attending an=20 investment convention, seminar or similar meeting. <U>Such write-offs = are now=20 forbidden.</U></FONT></STRONG><BR><BR>If you use a computer to analyze = or track=20 your investments, you may include<BR>in your miscellaneous expenses an = amount=20 for depreciation as long as you<BR>keep careful records that break down = the=20 amount of time you use the machine<BR>for investment versus personal = purposes.=20 The depreciation deduction is sure<BR>to be modest.<BR><BR>If you have a = $3,000=20 computer that you use 20% of the time on your<BR>investments, for = example, the=20 first-year depreciation deduction would be<BR>just $60. The first-year = write-off=20 for a computer not used more than half<BR>the time for business is 10% = of the=20 qualifying cost. In this example, the<BR>qualifying cost is $600 (20% of = $3,000). That's not much, but every dollar<BR>counts when you're trying = to scale=20 the 2% cliff between you and any<BR>miscellaneous=20 deductions.<BR></DIV></BODY></HTML> - ------=_NextPart_000_000C_01C34ABC.C0D35BD0-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email.
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