topic De mibiumus safe harbor in Get your taxes done using TurboTax

De mibiumus safe harbor

CarsonFon — Thu, 30 Dec 2021 16:24:32 GMT

This is my first year doing taxes and I came across De mibiumus safe harbor. I’ve been trading for almost a year now and I purchased a laptop and monitors for trading and they are all under the $2,500 threshold. My question is am I allowed to use this election even if I don’t make any money?

Re: De mibiumus safe harbor

Mike9241 — Thu, 30 Dec 2021 17:24:11 GMT

if your trading rises to the level of a trade or business then yes you can use it even if you operate at a loss.

Re: De mibiumus safe harbor

AmeliesUncle — Thu, 30 Dec 2021 17:37:53 GMT

@CarsonFon wrote:
even if I don’t make any money?

As Mike mentioned, is this a business? And if it is a business, why didn't you make any money? And what exactly do you mean by "trading"? How it is handled on the tax return depends on the details.

Re: De mibiumus safe harbor

CarsonFon — Thu, 30 Dec 2021 19:35:41 GMT

Should've been a little more specific, I honestly don't know what the IRS considers a business. Again I'm new to all this. I purchased a computer, monitor, trading subscription, etc... when I say "trading" I mean stocks and crypto. I would like to make this a business and my primary income at some point but as of now I am operating at a loss because when I first started I didn't know what I was doing, but then I got more serious and started getting all the necessary equipment and education

Re: De mibiumus safe harbor

DaveF1006 — Tue, 04 Jan 2022 01:33:51 GMT

It depends. If you are trading your own stocks and bonds, this isn't considered a business. It is only considered a business if make trades for someone else and your income is derived from the commissions you make trading other people's money. Otherwise, your trades are either capital gains or losses. This is true even if you trade fulltime.

With this said, you cannot deduct any expense for laptops or monitors because these are only for personal use.