Yes, there are tax deductions for investment income and expenses. Note that these deductions are claimed on the Schedule A of Form 1040. So if you don't usually itemize your deductions and take the standard deduction, this may not impact you. Publication 550 defines Investment Income as "interest, dividends, capital gains, and other types of distributions including mutual fund distributions." The deductible expense would be the interest paid on the loan that was used to purchase the investments. Note that "you cannot deduct interest and carrying charges allocable to personal property that is part of a straddle." The interest expense deduction is limited to your net investment income. However, the rest will carry over into the following year.
