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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 120811  
Subject: Re: Margin Interest Deduction Date: 2/11/1999 6:51 PM
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[[Barring anything unusual, investment interest expense (IIE) is deductible, but only
to the extent that your investment income (the sum of STCG, LTCG, interest &
dividend income) is positive; e.g. your investment income is $5,000 & your IIE
is $8,000; then $5,000 is deductible & $3,000 would be carried forward.]]

Please remember, Badger, that LONG term capital gains are NOT a part of net investment income for investmet interest purposes. Long term capital gains MUST be elected to be treated as part of net investment income. And if you make that election, you lose the preferred tax treatment on the long term capital gain.

So you have to be careful when you are dealing with LONG TERM capital gains and net investment income for investment interest purposes.

TMF Taxes
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