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Wednesday, January 26, 2011


by JC Leahy

Wilson Quality Inn and Suites
4941 Raleigh Road Parkway West (Exit 121, Interstate 95)
Wilson, NC  27896
Tel. 252-291-7744

Our Garmin GPS identified this as a Comfort Inn.  The front-desk answered, “Quality Inn.”  The receptionist said they became a Quality Inn about 5 years ago.  She was flexible on the room price.  The regular rate was $79 per night.  She said that the corporate/government/military rate was $72.   She advised me that the AAA/AARP rate was the best, at $62 per night.  That includes a pretty high-end continental breakfast. When I said I'd call back, she offered the $62 rate even though I didn't belong to AAA or AARP. 

There are 74 rooms in this hotel.  We stayed Friday night, and the place appeared to be nearly empty: Empty parking lot, empty lobby.   It occurred to me that the supposed economic recovery may not have reached Wilson, NC.

What I liked:

At first glance, our room was not remarkable: 2 queen sized beds in a room barely large enough to contain its furniture.  It had the usual coffee pot with a couple of envelopes of coffee, a microwave, and the usual wall-mounted hair dryer in the bathroom.  On closer inspection, however, the room impressed me for these reasons:

  1. Lighting is a problem in many hotel rooms.  This room had a comfortable easy chair with lighting ideal for relaxing with a good book or watching TV.
  2. It had a well-lighted desk/table with a comfortable leather desk chair. 
  3. Whereas many hotel’s rooms seem to hide the electric outlets, this room had plenty of places to plug in gadgets.  In fact, the base of each table top lamp included a single electric outlet conveniently situated in the front of its base.  
  4. There was a clear signal to free wi-fi.
  5. The outer aspect of the closet door was a full length mirror, which my wife found notable.
Also, about the hotel in general:
  1. The continental breakfast was complete and ample and the setting for eating it was bright and pleasant. 
  2. I didn’t see it, but the website claims there is a fitness room.  I like a hotel to have a fitness room.
  3. The lobby is bright and pleasant with inviting places to sit and read or watch the flat screen television.

What I didn’t like:

  1. Our room didn’t smell fresh.  It didn’t smell bad, and I couldn’t put my “finger” on the problem, but it just didn’t smell fresh.  My wife didn’t say anything, and she’s usually the sensitive one about environmental issues.  On the other hand, I’m usually obtuse to scent problems, and it just didn’t smell fresh to me.
  2. The swimming pool is outdoors.  This is of no use in January.
  3. There is no elevator in the hotel.  If you have a problem with stairs, you would need a first-floor room.
  4. There were no luggage carts situated near the front door.
  5. There is no restaurant or bar in the hotel, although there is a pancake house across the parking lot.
  6. Confusing information: Their website is confusing on one point.  One page boasts that it is a “pet friendly” hotel, but another page boasts that no pets are allowed.  If you travel with a pet (which I don’t) you might want to clarify that point.

The Bottom Line: THREE STARS

This Quality Inn represents a pleasant place to stop for a night or two.  The room is comfortable, well lit and convenient.  The lobby is pleasant.  The very nice breakfast makes this hotel a good value.


by JC Leahy

I planned to pack for our trip to Myrtle Beach Thursday night after work, but the wife arranged for a Thursday evening dinner out with the Pittsburgh daughter and boyfriend.   Since family relationships are absolutely crucial to the well lived life, I welcomed the dinner date as a grand idea – but I didn’t  pack for the trip on Thursday. 

I arose for packing early Friday.  Packing for a week-long trip is a big deal for me because I have goals for my leisure time and I need to pack the necessary tools and toys.  I planned to take photographs, so I needed a few photographic toys:  my Canon 1V-HS film camera (which, by the way, is the most tricked-out professional 35mm film camera in the world), my ultrasonic, image-stabilized 28-135 mm lens, my 70-300 lens, several rolls of ASA-100 Fuji Atvia slide film, my 430-EX flash with diffuser and belt holster, tripod, filters, timer, lens cleaning supplies, backup Pentax IQ-Zoom point and shoot film camera with several rolls of ASA-400 print film and belt holster.   I planned to organize my 2010 photo slides, so I needed my

portable light table, viewing loupe, plastic slide-
storage binder sleeves, sharpies, and a dozen boxes of slides.  I also needed to make very sure that my wife packed her digital camera.  And I planned to read, so I needed the right books for that including a book on Microsoft Project, a book on current economic issues, a self-improvement book, and a reading file on supply-demand-price issues in the gold market.   And I planned to write, so I needed to assemble some manila folders of background materials on topics.   And I planned to educate myself about foreign currency issues, so I brought along a book I had printed from an online source called Currency Trading for Dummies.  And I planned to assess the regulatory barriers to entering the child-care business, so I had brought along a background reading file about that, plus my Sheaffer Valor fountain pen with gold nib and a bottle of ink....and a computer with Microsoft Word.  And, our course, I love to swim so I needed my swimming suit.  I got up early Friday to pack.   I ended up forgetting only my cell phone charger, Bluetooth charger, and photo tripod.

She slept late.  For some reason, she hadn't gone to bed until 3:00 a.m.  She had an 8:30 appointment for her minivan’s oil changed, but missed that by a long shot. She made a new appointment for noon.  That gave me time to pack.  I planned to bring 2 suitcases, but when I finished packing I found that I needed only one – plus my laptop, camera bag, reading briefcase, and large cardboard box of “toys”.  As it turned out, she had to pack, also.  We rolled out the driveway headed for Myrtle Beach at 3:20 in the afternoon.  She promptly went to sleep, and when she awoke somewhere south of Richmond, she was fresh enough to spell me at the driving.

We got as far as Wilson, NC.  The idea was to get far enough along so that when we awoke Saturday, we would have time to make a leisurely drive to Myrtle Beach.   As we approached North Carolina, I used the GPS to perform a proximity search of lodging along our mapped travel route.  The first place I phoned was a Wilson, NC Comfort Inn, and that’s where we stayed for the night.

Thursday, January 20, 2011

Tuesday, January 18, 2011


by JC Leahy

This is so hilarious!!  Imagine the reaction of the "mainstream" Press if Sarah Palin  had botched her facts like this!!!

national motto letter sent to president obama from the congress of the united states sad hill news 3



Monday, January 17, 2011


by JC Leahy

Dwayne's Photo confirms that  the final deadline for receipt of Kodachrome film for developing has been postponed from December 30, 2010 to January 18, 2011.  This is not a postmark deadline; Dwayne's must receive your Kodachrome in their shop by close-of-business, Tuesday, January 18.  Otherwise, there will be nowhere in the world to develop your Kodachrome film in color -- thanks to Kodak.   Dwayne's reports that they have been "buried" in Kodachrome film in the last weeks of December before Kodak decided to strangle Kodachrome processing worldwide.  Even if you have your film in by the deadline, it will be weeks before the slides are shipped to you.

Saturday, January 15, 2011


By JC Leahy

I find it contemptuous that many Democrats, beginning with the local sheriff sought to blame Jared Lee Loughner's Arizona shooting rampage on the Tea Party and other conservatives.  Have you seen Jared Lee Loughner's YouTube profile?  I'm looking for some clue that he was influenced by a cnoservative source like Rush Limbaugh or Glenn Beck, and I just don't see it.  He lists absolutely no right wing interests.  On the contrary, his favorite books include the Communist Manifesto. I don't know ANY conservatives who list the Communist Manifesto as one of their all-time favorite books!!  He has his own flag burning video online.  I don't know ANY conservatives who are into flag burning. He is also  into creepy rock music -- I mean really creepy. That's a combination of creepy politics and creepy music.  Here's his YouTube profile (below).  (The MySpace web address he lists there reportedly was taken down minutes after Loughner was identified as the shooter..)  If you want to hear how creepy his musical tastes are, click on the link at the end of this article.

Here's another tidbit:  A certain Arizona woman named Caitie Parker, claimed on her Twitter feed that she went to high school and college with the Loughner, and was in a band with him. She described his politics as “left wing, quite liberal."  She also described him as a "political radical."  This fits with the American flag burning video.

The evidence is clear that Jared Lee Loughner was a "nut job," but not a "right wing" nut job.  Jared Lee Loughner was  influenced by creepy left wing politics and creepy rock music.   Is he, after all then, a left-wing wacko nut job??  Hmmmmm.... That is certainly food for thought, isn't it?  Check out the music video at the end of this article.  What do you think?

Name: Jared Lee Loughner
Channel Views: 3,891,908
Joined: October 25, 2010
About Me:

Hometown: Tucson
Country: United States
Schools: I attended school: Thornydale elementary,Tortolita Middle School, Mountain View Highschool, Northwest Aztec Middle College, and Pima Community College.
Interests: My favorite interest was reading, and I studied grammar. Conscience dreams were a great study in college!
Movies: (*My idiom: I could coin the moment!*)
Music: Pass me the strings!
Books: I had favorite books: Animal Farm, Brave New World, The Wizard Of OZ, Aesop Fables, The Odyssey, Alice Adventures Into Wonderland, Fahrenheit 451, Peter Pan, To Kill A Mockingbird, We The Living, Phantom Toll Booth, One Flew Over The Cuckoo's Nest, Pulp,Through The Looking Glass, The Communist Manifesto, Siddhartha, The Old Man And The Sea, Gulliver's Travels, Mein Kampf, The Republic, and Meno.

Friday, January 14, 2011


According to the Associated Press, the Kansas City Star has reported that Dwayne's Photo's deadline for processing Kodachrome film has been postponed from December 30 to January 10 or 11, 2011,  "at the earliest" because of an overwhelming demand for Kodachrome processing.

Click Here for Updated Information



   "To compel a man to subsidize with his taxes the propagation of ideas which he disbelieves and abhors is sinful and tyrannical."
                                                            --- Thomas Jefferson

Friday, January 7, 2011


By JC Leahy


This email to Dwayne's Photo :
Undeveloped roll of Kodachrome returned by Dwayne's

Clark Color Lab (District Photo) of Maryland, stupidly returned 2 rolls of Kodachrome film in December to my home address instead of sending on to you as usual. Consequently, it arrived back at my house on 1/3 instead of at your developing lab.  2 rolls of Christmas photos, Kodachrome 64 (lovely new grandson).   Do you have any Kodak chemicals left???  Would you PLEASE develop these 2 rolls of film?

And the unfortunate reply Jan. 7, 2011:

JC leahy,
Thank You for your question.
We are no longer accepting Kodachrome film for processing.  The only way to process these now are as black and white.  We can refer you to a lab for this, if you would like.

Please let me know if you require additional assistance.

Dwayne's Photo
PO Box 274 / 415 S. 32nd St.
Parsons, KS  67357

E-mail address of Dwayne's Photo:


By JC Leahy

Undeveloped roll of Kodachrome returned unprocessed by Dwayne's. Thanks a LOT, Kodak!!!

There is an uproar in the photographic community.  Kodak, it seems, has strangled worldwide processing of Kodachrome film with unconscionable haste.   By a combination of secrecy, market dominatioin, and asserting now-expired patents, Kodak had set itself up as the sole manufacturer not only of Kodachrome-type film but also of the chemicals needed to develop it. To this very day, Kodak has kept the recipe for Kodachrome's developing chemicals an industrial secret.   Kodak halted Kodachrome film manufacturing in 2009, and the last batch of Kodachrome "expired" at the end of November, 2010.  A mere 30 days later, the only Kodak-approved developing lab, Dwaynes Photo, abruptly halted developing of  This left photograhers "high and dry" with Christmas Season and other images which now, apparetnly, can never be developed.  Photographers frequently use film after it's marked "expiration date," simply by refrigerating or freezing the film until it is needed for use. Some photographers who use Kodachrome see Kodak's ultra-rapid strangulation of Kodachrome processing as un-caring at best, and at worst, a stab-in-the back to Kodak's most loyal consumers.

As one commentator at the L-Camera Forum said:

"I do not feel that I am asking for any favours [that Kodak should ensure processing of Kodachrome] ... The expiry of some of my 64 is 11/2010, and I am therefore surprised at what can be construed as an inelegant lack of latitude on Kodak's part."

As another commentator at the Huffington Post said more inelegantly:

Recent JC Leahy Kodachrome pic - Sigma SA-5 camera
with kit lens and fill flash

"It appears that Dwayne's has stopped developing Kodachrome not because there are no more rolls of film but because it has run out of the chemicals required to develop the film. Would it have killed Kodak to make another batch of the necessary chemicals?"

Kodak issued to following defense:

We announced on June 22, 2009 that we are retiring KODACHROME Film, concluding its 74-year run as a photography icon. Sales of this film, which became the world's first commercially successful color film in 1935, have declined dramatically in recent years. Today, KODACHROME Film represents just a fraction of one percent of our total sales of still-picture films. It was certainly a difficult decision to retire this film, given its rich history. However, the majority of today's photographers have voiced their preference to capture images with newer technology – both film and digital. Please be assured we remain committed to providing the highest-performing products, both film and digital, to meet those needs.

As you may know, for all of its magic, KODACHROME is a complex film to manufacture and an even more complex film to process. Current KODACHROME Film users are encouraged to try other KODAK Films, such as KODAK PROFESSIONAL EKTACHROME E100G and EKTAR 100 Film. These films both feature extremely fine grain. For more information, please visit:

We hope this issue has been resolved to your satisfaction. A Customer Satisfaction Survey will be emailed to you. Please take time to provide us with your feedback about this support experience, as it will help us in our on going effort to continually improve our support. Please make sure to check your spam and bulk folders in case the email survey does not go to your Inbox.

Thank you for your time. If you should have future questions on Kodak products or services, please feel free to visit our Web site at where we are continually adding new information to enhance our service. You may also wish to call our toll-free number at 800-242-2424. Our representatives are available to speak with you Monday through Friday from 9 a.m. to 7 p.m. Eastern Time.


Joel R.
Kodak Information and Technical Support

According to the History Blog:

"Before the [Dwayne's Photo processing ] deadline loomed so prominently, the store was developing an average of 700 rolls of film a day, which is a remarkable amount considering the dominance of digital. The end of an era stimulated a huge final rush of people bringing in every roll they've had lying around for decades."

"In the last weeks, dozens of visitors and thousands of overnight packages have raced here, transforming this small prairie-bound city not far from the Oklahoma border for a brief time into a center of nostalgia for the days when photographs appeared not in the sterile frame of a computer screen or in a pack of flimsy prints from the local drugstore but in the warm glow of a projector pulling an image from a carousel of vivid slides"

Personally, I think the Huffington Post commentator had it right:

Give us a break, Kodak!!!  Why the terrible rush to strangle Kodachrome developing???!!!  Would it have killed Kodak to make another batch of developing chemicals??  This is really abysmal customer relations, Kodak!!!!!!!  Will Kodak now at least publish the recipe for Kodachrome developing chemicals??  I doubt it.  In fact, personally I'm boycotting Kodak: no more Kodak products for me at home or work!!!!!!
"Would it have killed Kodak to make another batch of the necessary [developing] chemicals?"

Kodak's E-mail address:


Thursday, January 6, 2011



JC Leahy
Silver spring, MD 
Jan 6, 2011
Ken Carpenter, Customer Service Manager
District Photo
10501 Rhode Island Avenue
Beltsville, MD  20705
Dear Mr. Carpenter:
I have had Kodochrome film developed at District Photo/Clark Color Labs quite recently.  As recently as 2 days ago (January 4, 2011) I have phoned District Photo and been told that you do, indeed, develop Kodachrome.  I used my Canon EOS 1v-HS and shot 2 rolls of Kodachrome 64 at Christmas and mailed it to you 12/26 for developing.  I received it back undeveloped Monday, January 3 with a little form saying that the film was not compatible with your developing process.
I always suspected that you were “farming” the actual developing out to a bigger lab somewhere.  Alice in your Customer Service today confirmed that suspicion, saying it was Dwayne's Photo that was doing your Kodachrome processing.  Alice said you guys just found out last week about Dwayne’s discontinuing K-14 processing!!!  If true, that's amazing!

Anyway, here’s my beef:  You know that Dwayne Photo's deadline is the last deadline for Kodachrome processing anywhere in the world. It was then-or-never for developing these Christmas photos of my lovely new grandson.  Apparently Dwayne's deadline turned out to be January 3, 2011.  If you had just sent the film on as usual to Dwayne’s it would very likely have been developed.  Sending it back to me instead guaranteed that the Kodachrome processing deadline would be missed.  Your action was stupid and thoughtless and abysmal customer relations.

Wednesday, January 5, 2011


by JC Leahy, RN, BSN, MA
Sigma Theta Tau's "100 Most Extraordinary Nurses" Award

This week, one of my outpatients was shunted from clinic to clinic within the hospital and finally  to the ER.  This happened simply because the nurses did not know how to obtain a a pre-surgical urine sample from his urostomy.  The family came to me for suggestions.  I offered to obtain the urine sample myself.  If you are familiar with the procedure, collecting a urine sample from a urostomy is not rocket science.  I’m writing it down here for others who might need to know.
A urostomy is a surgical diversion of urine from a point before it reaches the bladder to an opening in the abdominal wall.  A urostomy is necessary when the bladder has been injured or surgically removed.  The artificial passageway for the urine is called a conduit and the opening in the abdominal wall is called a stoma.  The conduit is constructed from a section removed from the intestine.  If the large intestine is used, the conduit is called a colonic conduit.  If the small intestine (ileum) is used, it is called an ileal conduit.  Some urostomies drain continuously and are called incontinent urostomies.  Others have an internal collection reservoir and do not drain continuously.  They are called continent urostomies.  Patients with incontinent urostomies wear an external collection appliance (bag) which they empty as needed.  Those with continent urostomies must perform in-and-out catheterization on themselves, through their stomas,  4 to 6 times per day.
From the standpoint of the nurse, the urostomy will be a hole in the side of the abdomen and there may or may not be an external collection appliance. 
Preferred Procedure
 If a laboratory urine sample is needed,  whether it be a continent or incontinent urostomy, the vastly preferred method is to catheterize the stoma.  Before you begin, you will need to gather some supplies:
  1. Replacement supplies, if needed, for re-installing the external collection bag after catheterization.
  2. A #14 in-and-out rubber urine catheter
  3. Povidone-iodine (Betadine)
  4. Sterile 4x4 gauze
  5. Warm water
  6. Surgical lubricant
  7. Clean gloves
  8. Sterile gloves
  9. Surgical mask and eye protection
  10. A sterile specimen container :
Once you have gathered your supplies follow this procedure
  1. Explain to the patient what you are going to do.
  2. Wash your hands.
  3. Don clean gloves.  Surgical mask and eye protection are a good idea, too.
  4. Open your catheter package without actually touching the catheter itself, or if it’s in a kit open that kit. 
  5. Squeeze some surgical lubricant onto the tip of the tip of the catheter
  6. Remove the old collection pouch, if any.
  7. Clean the stoma site with warm water and sterile gauze. Very scant bleeding around the edges of the stoma may be normal, but bleeding from within the stoma may indicate a urinary tract infection or other abnormality.  If there's any bleeding, the best thing to do is report it to the physician.
  8. Don sterile gloves
  9. Clean the stoma site with providone iodine and sterile gauze
  10. Insert the #14 rubber in-and-out catheter into the stoma site and advance it about 2 to 2.25 inches.  If you meet resistance before reaching 2 inches, rotate the catheter gently until it slides forward.  If it still meets resistance, do not force it any farther.
  11. If urine does not flow into the catheter, ask the patient to shift position and/or cough to mobilize the urine.
  12. Place the other end of the urine catheter in the sterile container to receive the urine specimen.
  13. When you have enough urine for a laboratory sample, remove the catheter and cap the specimen container.
  14. Reapply the external collection appliance, if any.
Alternate Procedure
If the patient cannot be catheterized, the alternative procedure is to gently cleanse the site with warm water and apply a fresh, new collection appliance.  Wait for urine to collect in the appliance and then use the appliance’s drain to place urine into the sterile specimen cup.  If the patient is an outpatient coming to a clinic, you could even ask the patient or family to perform the warm water cleansing and application of a fresh, new appliance that morning; then there will be urine in the bag when he arrives for his appointment.

Further reading



Saturday, January 1, 2011

New Year's Resolution!!!!

Whoever is doing their online shopping through the Amazon links on , THANK YOU!!  I just received the monthly sales commission payment and, although the amount is minor, it's definitely UP! (When you enter Amazon though, the Journal gets a commission on the entire shopping session, as per by your actual check-out, at no cost to you.)   I write and edit the Journal for the joy of it, not the money -- but money helps. Just make it a habit, a NEW YEAR'S RESOLUTION to ALWAYS enter Amazon through any Amazon link located anywhere in !!  After all, it doesn't cost you a dime! Thanks again! -- JC Leahy



By JC Leahy, MA Accounting

As you plan your income tax return, don't forget about money you have shelled out to buy, sell, and manage your investments. I like to divide investment-related expenses into 4 categories, all of which are treated differently on your tax return:

• Category I: Those that you just can't deduct
• Category II: Those that relate to buying and selling particular investments
• Category III: Those that relate to buying, selling, and managing your investments in general
• Category IV: Those that relate to royalty income and real estate rentals.


Costs specifically related to tax-exempt investments can't be claimed on your tax return at all. Congress' reason for making it this way is that if you're not going to have to include the income on your tax return, you shouldn't be able to include the deductions either. That makes sense.

However, here's one little point to remember: IRA's and 401k's and similar vehicles are NOT tax exempt!! They are tax DEFERRED. This means that outlays related to managing your IRA are, indeed, tax deductible if other requirements are met. On the other hand, outlays related to managing your tax-exempt municipal bonds are NOT.

Travel costs to attend an investment seminar, conventions, or stockholder meetings, or to investigate potential rental property are generally NOT tax deductible. Congress made it this way because they noticed that these activities so often occur in warm, sunny vacation locations. That makes a certain amount of sense.

Another investment related outlay that can't be deducted is one that you didn't pay. For example, if your brother Bob paid your annual IRA management fee, you can't deduct it. (Neither can your brother Bob, by the way.) That makes sense.

This leads to one important point of caution, however. If, Bob doesn't pay that IRA management fee, and the IRA management company simply takes it out of your IRA account, you can't deduct it. Why? Because technically, although you control your IRA, you don't own it; it is owned by a trustee. Therefore, if the fee is simply deducted from your IRA account, YOU didn't pay it! Always pay your IRA related expenses from a source outside the IRA; that way they will be deductible!!

Another expense that you just can't deduct is any part of the basic monthly fee for the first telephone line in your house.


Outlays related to buying any investment are capitalized as part of the investment, increasing its cost basis. This reduces the amount of any gain when you sell the asset.

Outlays related to selling any investment are subtracted from the selling price, reducing it to the "net amount realized." Again, this lowers the amount of any taxable gain when you sell the asset.


Unless you're a "real estate professional" or professional securities trader, which is pretty narrowly defined, all these expenses of owning and managing your investments go on Schedule A (Itemized Deductions) of your Form 1040 as "Miscellaneous Itemized Deductions" -- all except expenses related to royalties and real estate rentals, which go on Schedule E. We'll talk about Schedule E expenses later; let's focus on Miscellaneous Itemized Deductions for now. Almost anything you can think of could be included here as long as these conditions are met:

• You must itemize your deductions using Schedule A of Form 1040.
• You must literally "pay or incur" the expense yourself.
• The expense must be "ordinary and necessary."
• The relationship between the investments and the expense must be "reasonable and proximate."

Here's a partial list of deductions to think about:

* Fees for investment advice
* Subscriptions to investment or financial publications
* IRA setup and custodial fees
* Software or online services to manage your investments
* Safe deposit box fees if used to store investment related documents
* Transportation costs to and from your broker or advisor's office – including mileage
* Attorney, accounting, or clerical costs
* Charges for automatic investment services or dividend reinvestment plans
* Costs to replace lost security certificates
* Straight-line depreciation on your computer and peripherals to the extent they were used to manage investments
* Bank deposit losses if not FDIC insured
* Casualty or theft of non-rental, non-royalty investment property
* Investment fees for non-publicly offered mutual funds shown in Box 5 of Form 1099-DIV
* Proxy fight expenses related to non-frivolous policy disputes
* Salary of a bookkeeper, secretary, or other employee to keep track of investments
* Investment property management expenses
* Investment interest

Once you have compiled your list of Miscellaneous Itemized Deductions, the amount you can actually deduct is subject to a series of different limitations:

FIRST of all, the amount of any investment interest you are claiming cannot exceed the amount of investment income. If it does, the excess must be eliminated from your miscellaneous itemized deductions. This excess can be carried over and deducted on your tax return in some future year. There is no limit to the number of years you can carry it forward until you get a chance to use the deduction.

SECOND, most Miscellaneous Itemized Deductions, including investment expenses, are subject to a "2% of AGI Floor." This means that you multiply your adjusted gross income by .02 and subtract that figure from your investment expenses and other Miscellaneous Itemized Deductions.

The only people who don't have to worry about the 2% of AGI reduction are professional securities traders, who can put all their expenses on a Schedule C. These insiders have no reduction or limit on their investment expenses writeo-off at all. (Go figure!!!)

THIRD: If there is anything left after applying the first two limitations, it is subject to being reduced by a "phase out" of your total itemized deductions. Phase-out of miscellaneous itemized deductions occurs if your Adjusted Gross Income exceeds certain thresholds. These thresholds are:

If your filing status is "married filing separately" $79,975
Single $159,950
Head of Household $159.950
Married Filing Jointly $159,950
(2 Singles living together out of wedlock = $159,950 x 2 $319,900)
(Do you see the big marriage penalty in those numbers?)

Generally, for your 2008 return, 27% of itemized deductions above these thresholds evaporate in this sneaky Congressional take-back called the "phase-out" of itemized deductions. Gambling losses, medical expenses (minus 7.5% of AGI "floor"), and casualty/theft losses (minus a series of limitations that apply only to casualties and thefts) are not subject to "phase-out."

And again, there is no phase-out for the insiders who are able to list their investment expenses on Schedule C.

FOURTH: If there is anything left of your Miscellaneous Itemized Deductions at this point, it is now subject to the Alternative Minimum Tax -- which completely disallows all of your investment expense deductions.

It is not a wondrous shell-game that Congress hath wrought!!!!.


Royalty and real estate rental expenses, which appear on Schedule E, must meet the same requirements as the Schedule A expenses, namely:

• You must literally "pay or incur" the expense yourself.
• The expense must be "ordinary and necessary."
• The relationship between the investments and the expense must be "reasonable and proximate."

In order to limit the amount of royalty and rental expenses you can deduct, Congress came up with a scheme that classifies all income into 3 categories: "Earned Income," "Portfolio Income" and "Passive Income." . Earned Income includes wages and the net income (or loss) from conducting a business or a farm and certain other things like unemployment compensation. Any other income, in Congress' view, is "Unearned." Unearned income is divided into Portfolio Income and Passive Income. Portfolio Income is interest and dividends stocks, bonds, and bank accounts. Passive Income relates to things such as real estate rental and royalties. The tricky part about Passive Income is that if your expenses exceed your revenues, the resultant loss CANNOT be deducted unless you have another passive activity that is producing an equal profit – which is referred to as a "passive income generator," or PIG. In most cases, because of depreciation of high-cost assets such as buildings, rental activities generate only a small profit, or, more often, a nondeductible loss. This is to say that the deduction for passive investment expenses is limited to the amount of passive revenue. The excess can be carried over to future years until either the asset is sold, in which case the accumulated carried forward losses become part of a capital transaction, or a PIG comes along.

There is one important exception to the limitation of deducting real estate rental losses. If you have more than 10% of a real estate rental and you help manage it in a "active" way, and if your "Modified Adjusted Gross Income" is less than certain thresholds, you may use up to $25,000 of rental loss to offset other non-passive income, such as a salary. The thresholds are:

Married filing separately Zero
Married filing separately as abandonded spouses $50,000
(But the exception amount is $12,500 each, not $25,000)
Single $100,000
Head of Household $100,000
Married Filing Jointly $100,000
(2 Singles living together out of wedlock = $100,000 x 2 $200,000)
(Anybody see a marriage penalty in these numbers?)

Between $100,000 and $150,000, the $25,000 exception is phased down to zero.

Another exception relates to "qualified real estate professionals." These insiders can deduct their real estate losses fully every time without limit.


The bottom line to all of these complexities, is to keep careful track of all those investment related expenses and consult your tax advisor about how to best use them. For assistance with your income tax filings, you may wish to contact me:

JC Leahy, MA Accounting
JC Leahy & Company, LLC
dba Maximum Legal Refund (TM)
Taxes Minimized to Your Best Advantage (TM)
Tel. 301-537-5365