[net.taxes] Safe Deposit Box deduction for collectables

smh@mhuxl.UUCP (henning) (01/06/86)

> Can anyone help me out regarding the circumstances in which one can deduct
> the cost of a safe deposit box?  I am holding some fairly
> valuable old coins and proof sets in my box, but I don't know if that counts
> as income producing property before they are sold,...

A profitable sale of a hobby collection held long term is taxable as
a capital gain.  LOSSES ARE NOT DEDUCTIBLE.  EXPENSES MAY ONLY BE ALLOWED
UP TO THE AMOUNT OF YOUR INCOME.  Remaining expenses are disallowed.  If
you show a profit in 2 of 5 consecutive years you pass the test of presumption
of profit seeking and the IRS may permit your expenses to exceed your
income.  If you do not want to make a declaration of presumption, you may
file Form 5213 to postpone for 4 years your declaration of presumption.