Colin, your answer to cj prompted me to ask about my personal situation.
I invest for a living. I have a single margin account, and run a substantial margin debt (I know, margin debt is risky, and probably unwise ... if I were starting again, I'd do without the debt).
When I buy securities, I either add to the margin debt, or sell offsetting securities. For living expenses, I periodically make cash withdrawals out of the margin account, and deposit those funds in my checking account. Whenever I take money out for living expenses, I always sell securities of equivalent or greater value, and note on the check withdrawing the funds "sale of xxx security yyy date".
My question: have I adequately protected myself by only withdrawing funds for my personal use when I sell securities of equivalent or greater value? I've assumed that by doing so I avoid the concern of commingling personal and investment debt ... and also am assuming all the margin interest on the account is investment interest, and hence is all deductible.
I hope you'll answer that you agree. My standard practice has been to be conservative in claiming deductions ... I haven't been audited to date, but if and when I am, I'd like to be above reproach on what I've claimed.
Thanks,
Peter |
