Margin Interest Deduction for Buying into LLC

[RobInCA]

Hi,

I took a loan against my brokerage account to purchase a passive interest in a multi-member real estate syndication LLC.  Am I able to deduct the full amount of the margin interest I paid as a business expense (instead of an investment expense)?

Thanks,

Rob

[Mike9241 · Accepted solution]

Investment interest expense is tax-deductible in some circumstances, but not when used for passive ventures, such as investing in a business that the taxpayer owns, but does not actively manage. so in your situation, it retains its character as investment interest 

[RobInCA]

Thank you for your reply.