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Subject:  Re: Margin Interest Deduction Date:  2/15/1999  2:25 AM
Author:  TMFTaxes Number:  10194 of 129421

[[ I know, but but I guess Badger has a point though, it seems that if you have
LTCG and STCL, then it may be worth while to recharacterize the LTCG as
STCL to the extent of the STCL, because it will get wiped out by the STCL
anyway, and by recharacterizing, a greater amount margin interest could be
deducted. ]]

Absolutely correct. It is a very good point. And, in virtually all cases, it really makes sense to make the appropriate election. But I just wanted to point out, as I'm sure that you did, that LTCGs are not AUTOMATICALLY considered a part of net investment income. You've gotta do some computations to see if it is worth the election.

[[ On the other hand, my reasoning is that as long as you can carry it over, you'll
get it all eventually because I just think that most people have int/div from

Correct again, Joe...all you are losing is the time value of money...certainly not the deduction per se. But by making the election, many times you can have the best of both worlds. It's really an interesting issue, and one that takes some thought.

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