Home-based trading activities can be deductible if they qualify as a business under IRS guidelines. To claim these deductions, you must demonstrate that your trading activities are substantial, frequent, and intended to generate a profit. Deductible expenses could include costs related to a home office, trading software, internet services, and other expenses directly tied to trading. Keep detailed records of these expenses to substantiate your claims. The IRS closely scrutinizes home-based trading deductions, so it is crucial to maintain comprehensive documentation, including transaction logs

Rent for a home office is deductible based on the percentage of your home used exclusively for business. To calculate this, measure the square footage of your office space and divide it by the total square footage of your home to determine the percentage. For example, if your office takes up 10% of your home, you can deduct 10% of the total rent payments. The space must be used exclusively and regularly for business activities, and not for personal use. It's essential to maintain proper documentation, including a floor plan, lease agreements, and measurements to substantiate the deduction. Th