This thread has a lot of cutting and pasting and no real summary:
- First and foremost, in order to benefit from this, a taxpayer needs to itemize their deductions which excludes a significant percentage of the population.
- The instructions for Sch A line 16 are very specific in what is allowed to be listed and deducted on this line; stock borrow fees are not listed in the instructions.
- Having said that, as has been noted, there could be a position to take this deduction based on a reading of the statute. But is this an unreasonable position? However, since the fees are not a listed deduction in the instructions to Sch A, be prepared for your return to be reviewed internally and possibly result in an audit. This will involve your time, possibly that of a tax professional, leading to an expense. Is this cost in excess of any tax savings? Could be, but we don't have those facts.
- Taking this position would clearly not be covered by any TT Audit Defense protection.
- You need to decide if the potential IRS scrutiny, potential audit is worth any tax savings; assuming you eventually prevail.
*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.
