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nrco1961
Returning Member

My margin Interest $30,000.0 but my Dividend income was $20,000.Can I deduct Entire amount of Margin Interest of $30,000.0 from my income or not, Itemized deduction

Margin Interest Charged by My Broker is $30,000. My dividend income is $20,000. I am filing Itemized deduction. Can I deduct entire $30,000 Interest Expense or not.

Please advise

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Accepted Solutions

My margin Interest $30,000.0 but my Dividend income was $20,000.Can I deduct Entire amount of Margin Interest of $30,000.0 from my income or not, Itemized deduction

The deduction for investment (margin) interest is limited to the amount of investment income.

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3 Replies

My margin Interest $30,000.0 but my Dividend income was $20,000.Can I deduct Entire amount of Margin Interest of $30,000.0 from my income or not, Itemized deduction

The deduction for investment (margin) interest is limited to the amount of investment income.

nrco1961
Returning Member

My margin Interest $30,000.0 but my Dividend income was $20,000.Can I deduct Entire amount of Margin Interest of $30,000.0 from my income or not, Itemized deduction

The unused portion of Interest Expense ($ 30000-20000) $10000, has to carried over. It must be noted/kept  by Turbo Tax. Where will it be recorded in my tax forms. Thanks for UR response
LisaBr
New Member

My margin Interest $30,000.0 but my Dividend income was $20,000.Can I deduct Entire amount of Margin Interest of $30,000.0 from my income or not, Itemized deduction

Yes, you can deduct the interest expense from your margin account.  If you have purchased taxable securities as investment interest, and you have paid the margin interest in 2017.

You can enter Investment Interest expense as follows:

  1. Go to Federal Taxes.
  2. Select Deductions & Credits
  3. Under Retirement and Investments, choose Investment Interest Expenses.

You can only deduct the portion that was used for investment purposes only. If you use any of the funds for personal such as home-improvements, down payment on car, etc. you may not deduct the interest expense allocated for personal use.

The following link is very helpful regarding deducting this expense:

https://www.irs.gov/pub/irs-pdf/p550.pdf

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