I don't know about it going away, but there are a bunch of gotchas the government puts in the way of claiming it. First, if you have investment expenses, the margin interest deduction gets reduced by those. Also, investment expenses are subject to a 2% AGI floor. If you look closely at form 4952, long term capital gains can also affect the deduction, as you have to elect to include them on the form, and that in turn will affect your schedule D long term cap gains calculation. If you claim trader status all this changes, but I'm guessing that is not what the poster will be claiming. All this of course, assumes one is not claiming the standard deduction, but itemizing. There is a thread on SI where a CPA by the name of Richard Green has posted quite often in the past concerning tax issues, the poster can get some good info over there...
Regards,
John
PS - There is a pretty good book out there addressing these types of issues, called 'The Trader's Tax Survival Guide' by Ted Tesser. I believe Trufflette pointed me to it a couple years back... |
