De mibiumus safe harbor

[CarsonFon]

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? 

[Mike9241]

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.

[AmeliesUncle]

---

@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.

[CarsonFon]

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

[DaveF1006 · Accepted solution]

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.