the interest would be reported as investment interest expense on form 4952. investment interest expense is only deductible to the extent of investment income - excess of net short-term capital gains over net long-term capital losses, taxable interest income, net royalty (schedule E) income and non-qualified dividends. you can make an election to include qualified dividends and net long-term capital gains. doing so in effect recharacterizes those items as non-qualified dividends. any excess investment interest may be carried forward.
TT automatically calculates the deductible amount and through manual input allows you to use L-T capital gains and qualified dividends
