In one brokerage account, are capital losses, section 1256 transaction losses and margin loan interest deducted from dividend and interest income within that account

[karemgh]

Hi

I have section 1256 transaction losses, short-term capital losses, and margin interest, (1099B) all exceeding the dividends and interest income amount (1099 div and 1099int) in one brokerage account.

Am I not allowed to subtract ALL losses from those dividends and interests, before paying tax on the NET profit (if positive)

My accountant is calculating the losses and only allowing 3000 in deductions, while I have to pay a huge tax bill on 1099div and 1099int, in the same brokerage account, which is NET negative (loss) for the year.

[AnnetteB6]

No, the accountant is correct.  Dividends and interest cannot be offset by capital losses or section 1256 losses.  

[karemgh]

Ty