From Lorraine: “I want to know if it is possible to include software (Pitbull, etc.) and subscription costs (Investors Business Daily, etc.) as part of your cost basis for taxes. Assuming you have any profits!”
A.T.: No. Investment expenses get lumped in with any other miscellaneous deductions you may have – including things like union dues, tax preparation fees, unreimbursed employee business expenses and costs incurred in a job search – and then only to the extent they all exceed 2% of your adjusted gross income, count as a deduction if you itemize. Say you have $600 in investment expenses, $150 in union dues and $40,000 in adjusted gross income. All but $800 of your $750 in investment expenses and union dues would be deductible – i.e., none of them.
One small thought in this regard. In the example above, you might try bunching your investment expenses every second year, so you had $1,200 one year and zero the next. Timing your subscriptions and purchases to work out this way just to get a small additional deduction may seem a bit obsessive – I wouldn’t bother with it myself. But it’s an option.
And now, on an entirely unrelated subject . . .
I shouldn’t have to tell you this, but some people seem not to get it – every so often you go in to a restaurant where they serve coffee in clear glass cups. Transparent cups. Surely you know coffee tastes watery this way. It must be served, and will taste much more robust, in an opaque cup or mug (white is best). It’s just simple physics.