Hello! For the past couple of years, I've had approximately $10,000 in investment interest expense (from buying stocks on margin) each year. I never "did anything with this," and each year it carried over. This year I have an additional $11,000.
In TurboTax, it is asking me if I want to "Make a Capital Gain Election" -- "Your return shows qualified dividends or capital gains income of $7,000. You may increase your investment interest deduction by electing to treat as much as $7,000 of your capital gain income as investment income. "
Could someone explain this to me? It seems advantageous to take advantage of this -- when I plug in $7000 for Capital Gains election amount, my refund increases by a little over $1,200. But I want to understand what is going on here. Could someone dumb this down for me (LOL)? I really appreciate it! Thanks!
