@Jewel61 wrote:
I have a tax professional who is telling me that my home is an "investment" and, therefore, my margin loan interest is deductible. Publication 936 just talks about mortgage interest (which a margin loan is not).
I'd like something I can share which would clarify this situation.
No. The IRS makes a distinction between personal property and investment property. Your personal home, where you live, is not being held as an investment.
Then, even if you could treat the home as an investment, you can only deduct interest against the income produced by the investment. No income, no deduction. You could report the interest, and carry it forward until you had income from the investment property (such as capital gains when you sell). But under normal circumstances, you can exclude the first $250,000 of capital gains from tax when you sell your personal home. If this is an investment, you don't get the capital gains exclusion, so you would pay more tax even if you could carry forward the margin loan interest for the indefinite future.
The investment interest calculation is reported on form 4952,
https://www.irs.gov/forms-pubs/about-form-4952
For the schedule A mortgage interest deduction, the loan must be secured by the home (which this was not).
See also publication 550.
https://www.irs.gov/publications/p550
This blog post
https://ttlc.intuit.com/turbotax-support/en-us/help-article/homeowner-tax-credits-deductions/differe...
