Sure you are - just go to work for somebody else. You didn’t think those considerations society gives to business owners came risk-free did you?
You’re trying to disanalogize those, but I don’t think it works. Just as transportation costs and work clothes are essential to virtually every worker, a business location and business equipment are essential to virtually every business. But it’s the latter two, not the former two, that can be written off.
You need clothes whether you are working or not. You do not need a business location or business equipment if there is no business. That’s why the unreimbursed cost of uniforms are tax deductible - because those specific clothes would not be necessary were you not working, and you wont be wearing the uniform when you are not working. That’s why Johnny Carson couldn’t deduct the cost of his suits - he wore them each day for work, but they were not a uniform.
Transportation costs in general may be essential to virtually every worker, but the costs are a function of where you choose to live. The tax code has not been set up to subsidize dispersed living. Commute from your 1st job to your 2nd job would typically be deductible. For that one, like much of the tax code, is that way because it is that way. I can’t think of a reason that is so.
Imagine your a regular office worker, and on the side you dabble in real estate rentals. You have 1 or 2 properties that you rent out with the assistance of a property manager. While they are cash flow positive, after mortgage and depreciation expense, along with the 8% for the property manager, they net a small book loss. Typically you’d be able to carry that passive loss against your earned income, but it is limited. It’s not your main business and you are not actively engaged in the management of real estate.
This is different for Trump. He is a “real estate professional” (ostensibly). When he has real estate losses, they are not passive - he is actively engaged in the business of real estate. Business losses of this nature are treated differently than other personal activity.
Except that in this case he stuck the investors and partners with a hefty debt forgiveness tax burden while transferring the financial benefits to his on personal financial gain.
This was not an action of fulfillment of one’s fiduciary responsibility, it was a money grab for personal gain.
Here is a list of tax loopholes that Trump almost certainly used which Sanders has proposed a bill to close.
http://www.sanders.senate.gov/newsroom/press-releases/sanders-announces-bill-to-close-tax-loopholes-used-by-trump
Click on the PDF for details. I had no idea these kind of tricks were possible with Real Estate. It’s one thing to claim a genuine loss and carry it forward, but it seems to me that using the tricks above Trumps actual loss in 1995 might have been many many times less than 916 million. In particular “Exemption for real estate from at-risk rules” it seems like this could be used for multiple people to claim the same loss for an entire project even if they only put a small fraction of the capital in. Thats pretty obscene if that’s what it allows.
It may be legal but it’s scummy as hell and needs to be closed.
The devil’s in the adjective :). Specifically, the adjective “business.” To correct your analogy, ask: do you need business clothes whether or not you’re working? Or ask: do you need a location if there is no business?
In the first case, no, you don’t need business clothes if you’re not working. Everyone I know has a separate wardrobe for work days and nonwork days.
In the second case, yes, you need a location if there’s not a business, unless you want to be homeless.
My dad bought a used (I think it was a dozen years old) Cessna 182 Skylane that he put on lease-back, because A) He wanted it, and B) As it lost money, he could write it off his taxes and basically get to fly it free. As a rental, it kept making him money.
Well, he is currently running for President, currently refusing to release his tax records, and currently criticizing various folk whom he feels do not bear their tax burden. So, yeah - it damned sure is relevant to current events.
That’s where the uniform criteria comes into play. If you have clothes that are specific to work and can’t be used otherwise, then that could be deductible. If you know me, then you know a person who has a wardrobe that is mostly used for work, but my suit can be worn at weddings, or other events. That’s not a separate wardrobe.
The same idea applies to your house. If you have a space that is exclusively used for a business, then it can be deductible. If you use it for your home office, but also conduct personal business there, that’s not.
My husband has work uniforms supplied by and cleaned by his employer. When he wants to do a dirty job, like work on his car, he wears the uniform. I suspect he’s not alone in this practice.
He also works from home part of the time. If we wanted, we could make his home office be 100% for his work – but it still wouldn’t be tax deductible.
In the case of the uniforms, the cost is borne entirely by the employer so there is no expense to deduct.
In the case of working from home part time, the home office deduction typically only applies if you are operating your own business, however it can apply if you are a W-2 wage employee if your working from home is for the convenience of the employer. If the employer had no principle place of business, and you work exclusively from your home as a result, then the home office deduction could apply. Fact pattern mattes of course, and there are other implications of taking the home office deduction, but based on what you’ve stated it’s not sufficient to make a determination.
I love how a conversation about Trump being a hypocritical gas-bag, pissing away a billion dollars in the casino business (as really successful businessmen do) and then not paying taxes for 18 years, has turned into an ethical treatise on the deduction of one’s work uniforms.
Superman can’t deflect anything this well.
A warning about this. Typically if you sell your home and make a profit, the profit up to some limit is not taxed. However if you have taken n% of your home area as a tax deductible home office, that percent of the gain is taxed. We found this out the last time we moved - fortunately we didn’t make all that much profit. It is why we don’t take my wife’s home office as a deduction now.
And we’re also losing sight of the fact that, other than being a successful businessman, there’s no reason to think he can successfully run a country. And losing [Dr. Evil]ONE BILLION DOLLARS[/Dr. Evil] in one year knocks a crater in that selling point.
The only remaining reason to vote for Trump is that he hates the people you hate, and he despises the people you despise.
Does it affect the amount of mortgage interest you can deduct? Just idle curiosity.
This is true, but it is also true that even if you did not take the deduction, if you are able to take it you must perform the recapture as well. There is no reason to not take it if you are eligible.
Some portion is attributable to the business, and the other is attributable to the personal. The interest cannot be deducted twice. The amount you can deduct is generally unchanged.
Sorry, don’t understand this. Clearly no one forces you to declare a part of your home as an office, even if it is being used that way, right?
In our current case the increase in value of our house leads to a much bigger increase in taxes when we sell than any gain from taking the home office deduction, so we did the right thing. And I’m not complaining.
We never changed our mortgage deduction, so if it does we didn’t get caught. When my wife started writing we saw a tax professional and he did our taxes the first few years, and I don’t recall he said anything about not all the mortgage being deductible.
Fact pattern matters, but this is what I was referring to:
(my bold).
The allowable above means that even if you didn’t take the depreciation, you still need to perform the recapture. This doesn’t apply to the simplified method above.
[Maxwell Smart]Ah, yes. The old False Flag trick, Chief. Gets 'em every time.[/MS]]