While ordinary dividends are taxed at ordinary income tax rates, they still remain dividend income. It's not clear what you mean by designating a portion of your qualified dividends as ordinary income. If you can provide additional information about this issue, that may help us better understand your tax situation.
Investment interest expense can be deducted; however, it is an itemized expense and therefore, must be entered on Schedule A. While it is deductible, that deduction is limited to your net investment income.
You can carry over the amount of investment interest you could not deduct because of this limit to the next tax year. The interest carried over is treated as investment interest paid or accrued in that next year. You can carry over disallowed investment interest to the next tax year even if it is more than your taxable income in the year the interest was paid or accrued.
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