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From: smh@mhuxl.UUCP (henning)
Newsgroups: net.taxes
Subject: Re: Safe Deposit Box deduction for collectables
Message-ID: <428@mhuxl.UUCP>
Date: Sun, 5-Jan-86 16:51:05 EST
Article-I.D.: mhuxl.428
Posted: Sun Jan  5 16:51:05 1986
Date-Received: Mon, 6-Jan-86 03:40:13 EST
References: <1721@cbosgd.UUCP> <640@ihlpm.UUCP>
Organization: AT&T Bell Laboratories, Murray Hill
Lines: 12

> 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.