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

[drn0821]

Same situation here, I tried and tried and each year my margin interest keeps getting carried over to the next year. For three years now I have not been able to claim this deduction which is clearly higher than the standard deduction. Does anyone have a resolution to this as it seems to be a glitch with the software. 

[RobertB4444]

Margin Interest is still deductible as an itemized deduction.  However, the deduction is limited to the amount of net investment income that you have received.  So if your net investment income is lower than the standard deduction that would explain why the system keeps taking the standard deduction instead.

@drn0821 

[drn0821]

Thanks for the reply, however, from what I see my net investment income is higher than the standard deduction of $14,000, so I should have been able to deduct this. I would understand if it was lower than the standard deduction. Sorry if that was not made clear in the original post. So what could have happened if in fact my net investment income was higher than the standard deduction?

@RobertB4444 

[DianeW777]

The net investment income does play a roll in the amount of investment interest expense you can deduct, but the overall itemize deductions must be higher than your standard deduction or they are not  used at all.  It would seem your standard deduction is higher so that is what is used.

Be sure you complete Form 4952 and answer all the questions in the screens.

• Deductions & Credits > Retirement and Investments > Investment Interest Expenses > Start or Update > Continue 

@drn0821