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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 22704
Experience:  Taxes, Immigration, Labor Relations
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My Business is a real estate company but the majority of our

Resolved Question:

My Business is a real estate company but the majority of our income recently is from investments and the dividends from equities it holds. My question is will general expenses such as computer hardware, travel etc. offset this type of income?
Submitted: 2 years ago.
Category: Tax
Expert:  Lev replied 2 years ago.

LEV :

Hi and welcome to Just Answer!
Generally investment expenses are deducted separately on schedule A - www.irs.gov/pub/irs-pdf/f1040sa.pdf - line 23.
Depending how your company is organized - if inversment income and investment expenses are passed to you - investment income and expenses should be reported separately.
Business related expenses are fully deducted against business income and only net business income is taxable.

LEV :

Please let me know how your business is taxed and if you need any help with reporting.

Customer:

So if i have office expenses and the like and no business income. Those expenses will go unused?

LEV :

You may deduct business office expenses against your business income - but not against your investment income.
You may have negative business income and use the business loss to offset other taxable income.

LEV :

However - I assumed that your company passes income to you. You did not mentioned if your company is C-corporation, S-corporation, partnership, LLC or any other business structure.
Let me know if you need any help or clarification.

Customer:

The company is a C-Corp.

Customer:

"You may deduct business office expenses against your business income - but not against your investment income.
You may have negative business income and use the business loss to offset other taxable income."

Customer:

The above answer seems a bit contrary. sorry for my confusion.

LEV :

The answer I provided is related to your personal income - you did not mention that you are asking for C-corporation.
C-corporation is a separate legal and taxing entity.
You are an employee of C-corporation and if you are using part of your home for business - you might be eligible to deduct your business office expenses.

LEV :

When you are talking about deduction of C-corporation - that is a different issue. C-corporation files its own tax return and deducts its own business related expenses.

LEV :

Thus if C-corporation owns computer hardware which is used for business - C-corporation generally deducts the cost of these equipment via depreciation.

LEV :

When we are talking about expenses - we need to separate C-corporation's expenses and your expenses as an employee of C-corporation.

Lev, Tax Advisor
Category: Tax
Satisfied Customers: 22704
Experience: Taxes, Immigration, Labor Relations
Lev and 3 other Tax Specialists are ready to help you

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