What investment expenses are deductible?

Whether you’re a stock market bull or bear, you have investment expenses – and you may be wondering if they’re deductible on your federal income tax return.

Here’s a quick review.

* What are investment expenses? Investment expenses are amounts you pay to produce or collect taxable income, or to manage, conserve, or maintain your investments.

Professional investment advice or financial newspaper subscriptions are examples of deductible items, as is safe deposit box rent when you use the box to store investment papers. You can also claim fees you incur for replacing stock certificates.

* How much is deductible? Investment expenses are miscellaneous itemized deductions, meaning your total costs generally have to be greater than 2% of your adjusted gross income before you benefit. Other limits may also apply.

* What isn’t deductible? Some investment costs, such as broker’s commissions for buying and selling stocks, are considered part of your basis and affect your gain or loss when you sell the investment instead of being currently deductible.

Travel and fees you pay to attend seminars, conventions, or other meetings – including stockholder meetings – are not deductible, nor are expenses related to tax-exempt income.

Other rules govern certain costs related to your investments, such as interest paid on money you borrow to buy stocks.

Please give us a call to discuss investment-related expenses. We’ll be happy to help you get the greatest benefit.

About Brenda J. McGivern, CPA

Brenda McGivern started her own certified public accounting and management consulting firm in October 2001. The full service CPA firm provides tax and accounting solutions to meet the needs of today's small business and individual. Brenda McGivern has become a trusted advisor and valuable resource her clients rely on for timely, accurate assistance when they need it. Before starting the firm, she worked as an accountant for three years at a local firm and prior to that five years at a large international CPA firm in Boston. She has performed the following tax services: federal, state and local tax planning, international tax planning, estate and succession planning, mergers and acquisitions, capital retention and IRS representation. She has also coordinated assurance engagements, such as financial statement audits, reviews and compilations from the planning phase through the reporting phase. She has prepared and reviewed regulatory filings for numerous regulatory agencies including the Security and Exchange Commission. Prior to these positions she was selected from over 2,000 candidates into an eight-person intensive financial management program at an international technology company. The program consisted of graduate level classroom study and two six-month rotational assignments in financial operations. She graduated cum laude from the University of Massachusetts at Amherst and holds a Bachelors Degree in Business Administration with a concentration in accounting. McGivern also holds a license in Massachusetts as a Certified Public Accountant and is a member of the American Society of Certified Public Accountants and the Massachusetts Society of Certified Public Accountants. She resides in Stoughton, Massachusetts with her husband Brian, and their sons Sean, Ryan and Conor and their dog, Davis.
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