topic If I already meet the 2% misc deduction floor on Sch-A, can I deduct investment expenses that I would otherwise list on Sch-E? Trying to avoid a Sch-E loss... in Business & farm

If I already meet the 2% misc deduction floor on Sch-A, can I deduct investment expenses that I would otherwise list on Sch-E? Trying to avoid a Sch-E loss...

data8504 — Sat, 01 Jun 2019 02:01:26 GMT

It's my first year with a rental property, and it looks like I'll have a Schedule E loss that I'll need to carry over. Bummer.

However, I got the bright idea that since I already meet the Schedule A miscellaneous deduction 2% floor (thanks to wife's continuing ed classes + union dues), maybe I could just move some investment expenses to Schedule A?

This would effectively let me reduce my loss on Schedule E, while increasing my deduction on Schedule A. Is this allowed?

No. That is called tax fraud and is not allowed.

jerry2000 — Sat, 01 Jun 2019 02:01:28 GMT

No. That is called tax fraud and is not allowed.

Hold on. I think I need a little more detail than that. S...

data8504 — Sat, 01 Jun 2019 02:01:29 GMT

Hold on. I think I need a little more detail than that. Sch-A's "miscellaneous deductions" specifically allows investment expenses to be included. What is it about these expenses (which are, by definition since they're eligible on Sch-E, "investment") that makes them ineligible for inclusion on Schedule A? Clearly I *cannot* list the same expense on *both* schedules (double dip), but what rule prevents me from choosing one versus the other?

Read the rules for where you claim Rental Income and Expe...

jerry2000 — Sat, 01 Jun 2019 02:01:31 GMT

Read the rules for where you claim Rental Income and Expense in IRS Pub 527:
at this link:
<a rel="nofollow" target="_blank" href="https://www.irs.gov/pub/irs-pdf/p527.pdf">https://www.irs.gov/pub/irs-pdf/p527.pdf</a>