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Strategies & Market Trends : Income Taxes and Record Keeping ( tax )
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To: Colin Cody who wrote (997)4/12/1998 10:08:00 AM
From: marc chatman  Read Replies (2) of 5810
 
I have a question for anyone who can help regarding treatment of margin interest.

Can anyone tell me whether margin interest which I paid in 1997 on my brokerage account is deductible for federal income taxes? I thought perhaps it could be an itemized expense under Schedule A, But Schedule A appears to point me to Form 4952, and the instructions there seem to exclude interest allocable to a passive activity. (Isn't stock market investment passive?)

Also, if Schedule A is applicable, does it matter whether I recognized a net gain for the year for all trades, or only with respect to the transaction for which I paid the margin interest.

The only other thing I can think of is to try to apply the expense as a part of the trade to which it pertained on Schedule D. That could be difficult, though, since the broker doesn't allocate the interest to a particular trade.

Thanks in advance.
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