Can't make deductions on Schedule C without income (Trader Tax Status)

[alg0rithm]

Hi,

I'm an active trader and am eligible for Trader Tax Status (https://www.irs.gov/taxtopics/tc429).

I report my income on Schedule B and Schedule D, and report my trading expenses on Schedule C.  However Turbo Tax won't allow me to take any deductions because I show no income on Schedule C.  How do I resolve this?

Thanks

[KrisD15 · Accepted solution]

You can enter expenses on schedule C without income. 

Enter the information concerning the home office, although it will first be disallowed. 

To use the Home Office Deduction you need to use TurboTax Desktop in order to make an edit. 

If you have not made a Mark to Market election, and since you say you use Schedule D, I assume you did not, you will need to compute the trading income (separate from any investment income on Schedule D).

Go to FORMS MODE in the Desktop program and enter that amount on Form 8829 Line 8. 

The Home Office Deduction will become active. 

[alg0rithm]

Thanks Kris.  Just to confirm, you're saying that this is only possible with Turbo Tax Desktop, and not the web app?  And I'm not electing MTM FYI.

[KrisD15]

The entry must be done manually onto Form 8829, there is no "Step-By-Step" process to do this. 

Only TurboTax Desktop lets you edit directly onto a form.