[net.taxes] Safe Deposit Box deduction

bah@cbosgd.UUCP (Bruce Hartsough) (12/30/85)

Can anyone help me out regarding the circumstances in which one can deduct
the cost of a safe deposit box?  The instructions with the 1040 last year
said that you could deduct this as an Expense of Producing Income, if you
used it to store "interest-bearing papers" or something to that effect.  This
year's instructions mention this as an example of something used "to manage
or protect property held for producing income".  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, or how loosely this can
be applied.

Any references or experiences with this would be appreciated.

Bruce Hartsough
..!cbosgd!bah

cosmos@druhi.UUCP (GuestRA) (12/31/85)

A safe deposit box can be deducted if (among others) it is used to contain
(protect) stock or bond certificates, savings bonds, stamps, coins, etc.
which are held for investment purposes.  

bmg@mck-csc.UUCP (Bernard M. Gunther) (01/02/86)

> Can anyone help me out regarding the circumstances in which one can deduct
> the cost of a safe deposit box? 
> 
> Bruce Hartsough

I don't have a reference on me at this point, but if I remember correctly
you can deduct the cost of a safe deposit box if you use it for important
papers such as your tax forms.  (Considering withholding, I consider these
income producing papers).

Bernie Gunther

gwn@ihlpm.UUCP (Novak) (01/02/86)

> Can anyone help me out regarding the circumstances in which one can deduct
> the cost of a safe deposit box?  The instructions with the 1040 last year
> said that you could deduct this as an Expense of Producing Income, if you
> used it to store "interest-bearing papers" or something to that effect.  This
> year's instructions mention this as an example of something used "to manage
> or protect property held for producing income".  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, or how loosely this can
> be applied.
> 
> Any references or experiences with this would be appreciated.
> 
> Bruce Hartsough
> ..!cbosgd!bah

I have stock certificates in my safety deposit box and every year that
I have those certificates, I take the cost of the box as a deduction
for my taxes.  I usually deduct the cost in the Miscellaneous deduction
area on schedule A.

Gary W. Novak @ A&T Bell Labs in Naperville, Il.
ihlpm!gwn

lab@rochester.UUCP (Lab Manager) (01/02/86)

In article <1721@cbosgd.UUCP> bah@cbosgd.UUCP (Bruce Hartsough) writes:
>Can anyone help me out regarding the circumstances in which one can deduct
>the cost of a safe deposit box?  The instructions with the 1040 last year
>said that you could deduct this as an Expense of Producing Income, if you
>used it to store "interest-bearing papers" or something to that effect.  This
>year's instructions mention this as an example of something used "to manage
>or protect property held for producing income".  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, or how loosely this can
>be applied.

I looked into this myself about a year ago. So long as you put investment
items in the box (be it bonds, stocks, etc.) no problem. Jewelry, etc.
won't go. Coins, only if you can show that you are an INVESTOR not a 
COLLECTOR, that is, you have a regular history of both buying and selling
substantial positions (if you only buy they will claim you are a
collector).

There is a reason NOT to deduct, however... since deducting alerts the
IRS you have a safty deposit box, when you die (or in other special
circumstances) they can put a lean on the box (no access until they look).
So, in terms of privacy, you may not want them to know.... Of course
they usually find out when you die anyway, but why make it easy? Just
be sure to use a bank you don't otherwise deal with.




-- 
Brad Miller	Arpa:	lab@rochester.arpa UUCP: rochester!lab 
			(also miller@rochester for non-lab stuff)
		Title:	CS Lab Manager
		Snail:	University of Rochester Computer Science Dept.
			617 Hylan Building Rochester NY 14627

rs55611@ihuxk.UUCP (Robert E. Schleicher) (01/02/86)

> Can anyone help me out regarding the circumstances in which one can deduct
> the cost of a safe deposit box?  The instructions with the 1040 last year
> said that you could deduct this as an Expense of Producing Income, if you
> used it to store "interest-bearing papers" or something to that effect.  This
> year's instructions mention this as an example of something used "to manage
> or protect property held for producing income".  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, or how loosely this can
> be applied.
> 
> Any references or experiences with this would be appreciated.
> 
> Bruce Hartsough
> ..!cbosgd!bah

If storing coins doesn't seem solid enough as a reason, just go
out and buy a savings bond ($25 or so), and stick it in the safe deposit
box.  That meets the letter of the law.  In reality, no one is ever going 
to know what's in their anyway, so the important thing is to just hold on
to the receipt for the box rental.

Bob Schleicher
ihuxk!rs55611

johnson@hplabsc.UUCP (Mark Scott Johnson) (01/03/86)

> Can anyone help me out regarding the circumstances in which one can deduct
> the cost of a safe deposit box?  The instructions with the 1040 last year
> said that you could deduct this as an Expense of Producing Income, if you
> used it to store "interest-bearing papers" or something to that effect.  This
> year's instructions mention this as an example of something used "to manage
> or protect property held for producing income".  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, or how loosely this can
> be applied.
> 
> Any references or experiences with this would be appreciated.
> 
> Bruce Hartsough
> ..!cbosgd!bah

If the coins were purchased "as an investment" (as opposed to merely a hobby),
the cost of the safe deposit box should be deductible.  I don't have any
specific references, but it is a general IRS philosophy that "intention"
plays a big role in determining deductibility.
-- 
Mark Scott Johnson
ARPAnet: Johnson%hplabs@csnet-relay.ARPA
HPDesk:  Mark Johnson/HP1900/UX
USEnet:  {allegra,decvax,Shasta,ucbvax}!hplabs!johnson

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

> you can deduct the cost of a safe deposit box if you use it for important
> papers such as your tax forms.  

Sorry, but the IRS does't qualify any personal effects like important papers
unless the papers are held for the production of income.  Question: do you
pay income tax on your withholding or refund?  If not, then your safe deposit
box doesn't qualify for a deduction.