Thanks all for responding, but I think this response is right on and I was thinking about it more today before I checked these responses. I almost get to double count in a sense. The LT loss wipes out my ST gain so my net cap gain is all at LT rates (tax advantaged).
The investment interest expense is a separate form and since it goes against interest, ordinary dividends and ST gains, those ST gains (even though they were already offset by LT gains for net cap gain tax rate) still allow me to deduct more of my interest expense.
Normally I would be using that deduction to offset my ST gains taxed at ordinary/marginal rates but in this case I get to deduct and all cap gains are already tax advantaged. Win win!
