Do not adjust the basis of the stock. Take the expense on Form 4952.
If you borrow money to purchase an investment, you may qualify for a tax break. The IRS allows certain taxpayers to take a tax deduction for the interest expense on some loans using Form 4952. However, the tax ramifications of investment interest can be complicated, as the IRS only allows a deduction for certain types of investment interest.
To enter/edit Form 4952 (Investment Interest Expense Deduction):
1. Open your return (or continue if open).
2. Type “4952” (upper-case works too) in the Search box (upper right-hand corner of the screen)
3. Click on “Jump to 4952” link.
4. Answer screen interview prompts.
Form 4952
