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I have a margin account with Scotsdale that was originally funded with stocks I owned (not cash). I have used that equity to buy 8 Rule Breakers. Each month Scottsdale charges me interest on the total money I have borrowed in my margin account. Yes I'm paying interest on interest. I have never added cash to this account. I have always considered the interest charges as investment interest expense.

So back to the original question. Is this interest really deductibale or do I have to pay it in cash?

Isn't it subject to the 2% of AGI rule also?
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