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To: RealMuLan who wrote (16907)	11/26/2004 10:01:37 PM
From: RealMuLan	Read Replies (1) \| Respond to of 116555

Currency change seen to cool China inflation By Yumi Kuramitsu Bloomberg News China may relax the yuan's decade-old peg to the dollar by April 1 as the government attempts to slow inflation and cool economic growth, analysts at Bank of America and Merrill Lynch said. Letting the yuan strengthen from the fixed rate of 8.3 per dollar or linking it to a basket of currencies including the euro will reduce import prices, said Uwe Parpart, Bank of America's senior market strategist in Hong Kong. It may also reduce export growth and add to President Hu Jintao's bid to slow investment, which includes banning loans to industries such as autos, cement and steel, and the first interest-rate increase in nine years. seattletimes.nwsource.com

To: RealMuLan who wrote (16907)	11/27/2004 9:06:25 AM
From: Tommaso	Read Replies (1) \| Respond to of 116555

Anyone who does that may find that they are liable for taxes, fines, and penalties if the IRS disallows the deduction. A loan is either secured or unsecured. If it is secured by a house, or by stocks , bonds, or other investments, the interest is usually deductible if you itemize deductions and if you have investment income. If it is secured by something else (an automobile, say) or unsecured, the interest is not deductible.

To: RealMuLan who wrote (16907)	11/27/2004 9:38:32 AM
From: Tommaso	Respond to of 116555

There are certainly ways of getting around the law. For example, you can carry your stocks on margin and buy a car with the money that you do not put into your brokerage account. Your interest is deductible as an investment expense. But the margin loan is secured by the stocks. If you pledge your car a security for a loan and buy stocks with that money, you cannot legally deduct those interest payments.It is also true, as you suggest, that if you can show that you took the proceeds from a specific loan and bought stocks with it, you can deduct the portion of the interest that can be assigned to the stocks as an investment expense. But even in doing these things, one must be careful: We took a margin loan from our investment money market account. Can the interest we paid be deducted? If you are a cash method taxpayer, you can deduct interest on margin accounts to buy taxable securities as investment interest in the year you pay it. You are considered to have paid interest on these accounts only when you actually pay the broker or when payment becomes available to the broker through your account. Payment may become available to the broker through your account when the broker collects dividends or interest for your account, or sells securities held for you or received from you. You cannot deduct any interest on money borrowed for personal reasons. Investment interest deductions are limited to the extent of investment income. The deductions amount is reported on Form 4952 (PDF), Investment Interest Deduction. The deduction is then taken as an itemized deduction on line 13 of Form 1040, Schedule A (PDF), Itemized Deductions. For more information, refer to Publication 550, Investment Income and Expenses. irs.gov