Where do I enter interest paid on a SPA Loan (NOT a SBA or student loan,it is specific to my investment portfolio - Stifel Pledged Asset Loan)?

[tmd578]

I did not receive any sort of 1099 or "official" tax document for this, only a letter from Stifel stating the amount of interest paid. 

More info:

"The SPA Account is a Line of Credit secured by your investments or marketable securities." "The Stifel Pledged Asset, or SPA Loan Account, keeps your assets in place while providing you access to the equity within those assets as cash." "The SPA Account is a demand loan using the assets in the account as collateral."  

[CherylW]

If it's for interest you received, treat it as you would a 1099-INT:

1.       Click Federal on the left-hand side menu.

2.       Click Income across the top.

3.       Scroll down to Interest and Dividends and click Show more.

4.       Click Start or Revisit by Interest on 1099-INT.

If it's for interest you paid, you can't deduct it UNLESS it's secured by your personal residence.  In that case, it's treated as mortgage interest:

1.  Click Federal on the left-hand side menu.

2.  Click Deductions & Credits across the top.

3.  Scroll down to Your Home and click Show more.

4.  Click Start or Revisit by Mortgage Interest, Refinancing, and Insurance (Form 1098).

[tmd578]

Hi Cheryl, thanks so much for your response. The loan was opened in 2016 to help me pay the downpayment on my house, so I'm not sure if that would make it secured by my residence or not? I received a separate 1098 from my mortgage company

[CherylW]

I don't know your exact situation, so I can't definitively answer that one.  This is from Publication 936, Home Mortgage Interest Deduction:  

Secured Debt

You can deduct your home mortgage interest only if your mortgage is a secured debt. A secured debt is one in which you sign an instrument (such as a mortgage, deed of trust, or land contract) that:

Makes your ownership in a qualified home security for payment of the debt,
Provides, in case of default, that your home could satisfy the debt, and
Is recorded or is otherwise perfected under any state or local law that applies.

In other words, your mortgage is a secured debt if you put your home up as collateral to protect the interests of the lender. If you can't pay the debt, your home can then serve as payment to the lender to satisfy (pay) the debt.

[tmd578]

In this case, the loan is secured by my investment portfolio then and not my home, I assume...

I am fairly sure my CPA I used for 2016 return did claim it, but I have also been told it's a bit of a gray area

[CherylW]

ok, good luck!