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I'm not sure I understand what you are asking, but here's what will happen.

Every time the broker posts an interest charge to your margin account it gets added to the principal you owe. The only time the distinction is important is when you file your tax return.

When you sell stock in a margin account, the proceeds are usually applied to reduce the size of the outstanding loan which includes the original principal and all of the subsequent margin interest.

You do not have to apply the proceeds separately to interest or principal.

When you file your taxes, you may be able to deduct the amount of margin interest your broker has charged you as an itemized deduction. You will have to fill out Form 4952 and Schedule A to determine how much is deductible.

If this hasn't answered your questions, try asking again.

Ira
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