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Author: math999man Big red star, 1000 posts Old School Fool Global Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121219  
Subject: Deducting Margin Interest in CY2011 Date: 1/9/2011 11:19 PM
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I have considerable margin interest from cy2010 - several thousand dollars. Now, I can not do anything about cy2010 - it seems that I can not write any of the margin interest off from cy2010 taxes.

But lets talk about CY2011 - the upcoming year. I know some of the basic rules about margin interest - i.e. I must pay it in cash, etc.. I am VERY VERY flexible about what I can sell at end of any year (like cy2011) if I wanted a short or long capital gain or loss. I have a
lot of stocks (both short and long) that are loosing and gaining (any combo you can think of !). No matter what net result I end up as far of total net stock loss or total net stock
gain, I can never deduct margin interest !

I suspect the main reason if that I do NOT itemize deductions ! I live in an apartment (no home, no mortgage, limited investment expenses (i.e. fool.com letters, and not much more), charity, no medical expenses to speak off, etc.. ) - in other words - I just take the standard single person deduction.

I am not going to get home mortgage just to deduct it and be able to take off margin interest - or get married to deduct margin interest.

With the flexibility I have in my investments (loss, gain, short, long, carryover from previous years), there must be legal some way of deducting margin interest in cy2011.

Any suggestions ? Or this only way is via the itemized deduction approach ? For CY2010 taxes - I am using TURBO tax and I assume that the program is using losses/gains/short/long/carryover loss, etc.. as best possible, but for CY2011 what can be done so that I can ensure deducting margin interest made in cy2011 for cy2011 taxes.

I think it is better to ask now to get a handle what comes down the road - December cy2011.

math999man
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