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Strategies & Market Trends : IRS, Tax related strategies--Traders -- Ignore unavailable to you. Want to Upgrade?

To: mod who wrote (720)	2/14/1999 9:28:00 PM
From: Colin Cody	Read Replies (1) \| Respond to of 1383

Mod, To use Sec 179 in a given year you MUST have income from any trade or business to "offset" it against. What is being skirted over here today is the definition of "income from any trade or business". Having a loss showing on a Trader's Schedule C does not mean one necessarily has no "income from any trade or business". This is a GRAY AREA that is best discussed with one's personal tax advisor who is familiar with all aspects of the taxpayer's income. Colin

To: mod who wrote (720)	2/14/1999 10:05:00 PM
From: robbie	Read Replies (1) \| Respond to of 1383

mod, I'll try one more time. Traders (or any other person in a trade or business) may deduct their expenses in excess of their income, and report a loss. However, to elect to expense certain capital expenditures (such as equipment - computers, etc.), rather than capitalize and depreciate them, you must have income to offset the Section 179 expense deduction. You must have income from self-employment, or wages, to offset a loss created by the Section 179 deduction. Otherwise, you must capitalize and depreciate. You can report a loss from trading - sure - and deduct all of your expenses, you just can't expense capital items such as a computer unless you have income to offset the expense. I've said it every way I know how. Robbie