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Get your taxes done using TurboTax
Thank you for clarifying the issue. Appreciate your thorough and prompt response.
A few follow up questions:
1. In that case, would a conservative approach then to avoid any unwarranted IRS attention be to use 1099 Misc to report any PIL I have?
2. I would owe neither SE tax (assuming I max Social Security on W2 wages, this would be 2.9% and not 15.3% in your message, correct?) nor NIIT (3.8%). Since these are not considered wages, I assume I wouldn't owe medicare taxes either? So I "only" pay the applicable federal and state taxes and no SE/ NIIT/ Medicare taxes?
3. Lastly, I can't deduct the margin expense against PILs? If I have a surplus margin expense after offsetting all my investment income, it is best to carry it forward to a future year?
4. Does the carry forward of margin expense work only if I itemize deductions? If I use SD since the margin expense isn't high enough, I forfeit the margin expense from this as well as all prior years and can't carry it to next year?
Thank you so much.