Ah, ok - that does make sense. Form 4952 is very confusing because it does some separating out ST gains from LT gains, which I get because of the special tax treatment of LT gains, so to calculate net investment income I always assumed it was your full interest income, ordinary dividend income and ST cap gains (not your net cap gain), but what you describe prevents me from double dipping in the scenario I laid out. I will just have a big interest expense deduction carrying forward to future years. At least it carries forward indefinitely. Thanks.
