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Strategies & Market Trends : Income Taxes and Record Keeping ( tax ) -- Ignore unavailable to you. Want to Upgrade?

To: marc chatman who wrote (998)	4/12/1998 10:50:00 AM
From: Brendan W	Respond to of 5810

I don't know but my experience stock investments are NOT passive and the margin interest is deductible to the extent of ordinary income on the form you mention.

To: marc chatman who wrote (998)	4/12/1998 11:08:00 AM
From: Spots	Read Replies (2) \| Respond to of 5810

If all your investment income was from from securities and derivatives (stocks, bonds, options, etc), it is not passive for the purpose of deducting investment interest expense (margin interest in your case). This income includes dividends, interest, and net capital gains (or losses). You have to file 4952 which steps you through the calculations, but the net of it is the total of cap gains/losses + interest + dividends limits your deduction of margin interest (losses are negative, of course). If your margin interest is less than or equal to this total, you can deduct it all on Sched A. If exceeds it you can't deduct the excess, but you can carry it forward to future years.