Line of credit on brokerage account

[Pran]

I am planning to take the line of credit against the stocks I have in my brokerage account.

This is because I cannot sell my stocks at their current prices as it will end up in huge losses.

The line of credit helps me to borrow money at lower rate against my stocks and fulfill my financial needs.

Will the interest I pay for the money I borrow from my brokerage account for the line of credit eligible for deducting the taxes? 

[Critter-3]

Nope ... personal interest is not deductible.  This would be like taking a cash advance on your credit card.  

[Mike9241]

borrowings from your brokerage account secured by the securities will be investment interest. investment interest is reported on form 4952 (schedule a) but is only deductible to extent of investment income (interest and non-qualified dividends) you can elect to have qualified dividends and long-term capital gains to be like nonqualified income applied.  any excess investment interest expense can be carried forward 

[fanfare]

For some reason Jeff Bezos's interest expense of $43 million is deductible but yours is not.

[Critter-3]

I am sure he has this "loan" buried in a corporation of some kind.  People like this never have "personal" loans they keep everything in a business at arm's length. Remember the rich have many accountants and lawyers structuring  situations with many layers ... Trump is the prime example. 

Now for your situation ... personal interest has not been deductible for decades.  And MARGIN interest "may" be deductible on the 4952 but with  restrictions (of which a big player would be able to make use of if structured properly).   AND maybe you could use the tracing rules  but ONLY IF you could make a case in an IRS audit that supports that the interest was solely for the purpose of investing in a business property.  

[Critter-3]

Look at how clever he is ... paying no personal income taxes and getting the CTC because he structured his income in such a way to get the result he desired.   

[fanfare]

we can only hope he had enough class to return the CTC to the US Treasury.

Maybe he never even notices these things.

[fanfare]

you can deduct margin interest if

you itemize, and

you have qualified dividends to offset for this purpose.

This may or may not be to your advantage.