club_cafe: Tax Deduction for Club Related Expenses - HELP - club_cafe

club_cafe: Tax Deduction for Club Related Expenses - HELP

iras1 on

In a message dated 2/7/2006 11:10:54 A.M. Eastern Standard Time, loutaormina@bivio.com writes:

Great site....Our club has been members since 2000. Was doing some thinking recently regarding possible tax deductions that I have may not have been taking advantage of in the past. I am the President of our club which is a partnership registered in NY State.

I was wondering if I (or the club) can take a tax deduction for the following:

1) purchase of a computer

2) purchase of a shredder

3) purchase of a wireless router

4) subscription to Barrons, WSJ, etc

5) telephone bill

6) cable and internet bill

7) food purchases/drinks during club meetings

Theoretically, all but the last could be deductible expenses. However, the computer, shredder, and router would have to be capitalized and depreciated. Too much headache for a deduction that hardly anyone would benefit from since the total deduction would still be subject to a 2% of AGI haircut on each partner's personal income tax return.

Some of these have been for 100% club use (ie, food/drinks for meetings, barron's, wsj, subscriptions) and some are a combination of personal and club use (ie computer, internet, etc). I imagine that there must be a way to take a deduction?

Yes, you prorate the expense between personal (non-deductible) and investment (deductible) use. You can deduct the investment portion of the expense (subject to all the usual rules on investment expenses).

Being the club President, I would be the one taking the deduction since I put have historically been the one paying the money for the shredder, computer, etc. Are these individual deductions or should I have bought them with club money and taken the deduction that way??

The best way is the simplest. You pay the expense, you deduct the appropriate amounts on your personal return and leave the club out of it. If, on the other hand, you are saying that you never would have incurred these expenses if it weren't for the club, then they should have been paid with club funds.

Any help in steering me in the right direction would be much appreciated.

Hope I've helped.

Ira Smilovitz

Lynn Ostrem on

Hi Ira,

> ...the computer, shredder, and router would have to be capitalized and depreciated.

I wouldn't take these deductions myself, but what if a member purchased them for use by the club? Couldn't a $49 shredder simply be expensed?

Lynn

al on

I usually burn the paper in the fireplace. Is that tax-deductible? Gas is expensive now days.

-----Original Message-----
From: club_cafe-owner@bivio.com [mailto:club_cafe-owner@bivio.com] On Behalf Of Lynn Ostrem
Sent: Tuesday, February 07, 2006 10:46 AM
To: The Club Cafe
Subject: Re: club_cafe: Tax Deduction for Club Related Expenses - HELP

Hi Ira,

> ...the computer, shredder, and router would have to be capitalized and depreciated.

I wouldn't take these deductions myself, but what if a member purchased them for use by the club? Couldn't a $49 shredder simply be expensed?

Lynn

Lynn Ostrem on

I just received a message from a business friend of mine about a website at www.flashtalk.com. We were looking for a no-cost/low-cost place to hold conference calls. This website will allow up to 1,000 callers at a time for only $3.95 per month per person. Internet telephony's at its best. Free trial. Might be a cheap alternative for an online club.

Lynn Ostrem, President
garbagecop@foxinternet.net
Crow River Investment Club
www.bivio.com/crowriver

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