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Subject:  Re: Margin interest expense Date:  3/9/1998  10:49 AM
Author:  TMFTaxes Number:  2518 of 127519

[[The most confusing part of tax preparation for me is figuring whether or not I can claim the margin
interest that I paid to buy stocks in 1997. My margin interest was about $750. Dividends paid on
stocks were about $275. It's very difficult to understand the rules concerning margin interest. They
start talking about passive investments and the like. For several years I have forgone the possible
claim. Even if I claimed it somehow, I'd probably have to use Form 4952.
Does anybody out there claim margin interest?]]

Margin interest (or, more properly "investment interest expense") can get a bit confusing. But you certainly, IMHO, claim those expenses...especially if you itemize your deductions. Any investment interest that is not currently deductible (because your net investment income may not be enough to cover the entire interest expense amount) can be carried forward to be used in future years.

And net invesmtnet income includes not only dividends, but interest, capital gains, royalties, and some annuities. So you may have MORE investment income than you realize, and my qualify for the deduction.

For additional information, check out IRS Publication 550 and Form 4952 and instructions. Do your best to wade through this verbage in order to secure and report your deduction.

TMF Taxes

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