Investment expenses

[tmike]

I have a a client (Husband and wife) who paid $23999 to join, participate or otherwise learn how to wisely invest. Without getting into why someone would do this I am wondering if anyone has any thoughts on the deductability of any or all of these expenses. It does not qualify for lifetime learning credit because it is not an accredited school. It also does not seem to qualify under Sec. 274(h)(7). This package included a seminar, "coaching" workshops and other things designed to make one a successful investor. Any thoughts on this would be appreciated. -Mike-

[JRS]

Quoting from Pub 17, "You cannot deduct any expenses for attending a convention, seminar, or similar meeting for investment purposes." Unfortunately, that pretty well sums it up. I have had more than one client "fall" for the "fast talking pros." It is sad that these people can get away with this, but you can't prove that their theories don't work. They always seem to be able to "prove their track record," and they leave the client thinking the seminar or whatever is a deductable investment expense.

[tmike]

Thanks JRS,

That was my thought as well. -Mike-

[JohnH]

All is not lost, however.

Hopefully the client got a pretty good education on wise investing vs unwise investing the minute they wrote the $24K check.

[Byron]

One of the secrets of wise investing is to now convince others to give them 24K for the secret. Sort of Pay-it-Forward.

[JohnH]

"How to Make a Small Fortune Investing"

1) Start with a large fortune

2) Sign up for classes on investing at $24K each

3) Stop taking classes when your fortune has shrunk enough to be called "small".

Easy & simple.