Income Taxes and Record Keeping ( tax ) Message Board

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Strategies & Market Trends : Income Taxes and Record Keeping ( tax )

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To: Daphne who wrote (992)	4/11/1998 11:41:00 PM
From: Colin Cody	Read Replies (1) of 5810

Daphne, You said: "in reference to my first question These assets are used 99.999% for business." . Now, let me refer to your original question: "If filing as investor (expenses on Schedule A) can: 1. Sec 179 be taken?" . My answer was to your question, which stated you were an INVESTOR, using Schedule A for your deductions!! . "I would like to file as a trader but am afraid the smaller number of trades in the latter part of the year and the amount of interest income vs trading income will be a problem What is your opinion?" YOU DESCRIBE A CLASSIC CASE WHICH WAS COVERED BY SEVERAL TAX COURT CASES. WITHOUT EXCEPTION THE IRS WON, AND THE TAXPAYER WAS RECLASSIFIED FROM "TRADER" TO "INVESTOR". . "For the rest of the year our trades only number about 20 because we were testing and learning and in the latter part of the year our indicators said to stay out of the market so we did not trade after oct. but still worked more than full time developing." THIS STATEMENT IS A DANGER SIGNAL. IN GENERAL THE TAX LAW PROHIBITS DEDUCTIONS FOR DEVELOPMENT OF A NEW BUSINESS. SUCH SET-UP AND ORGANIZATIONAL EXPENSES ARE CAPITALIZED AND AMORTIZED OVER A PERIOD NOT LESS THAN 60 MONTHS. YOU MAY WISH TO RETHINK YOUR POSITION HERE... GOOD LUCK COLIN NOW REGARDING "we should have a large profit this year." WELL????(G)

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