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I am assuming that the margin interest will end up somewhere as a deduction on the 2000 return.

Margin interest is deductible to the extent of investment income on line 13 of Sched. A (You may need to fill out a Form 4952 also.)

Are the shares that I retained as the profit from my transaction a capital gain if I just hold them and don't realize a cash profit?

They are not a capital gain until you realize the gain by selling the shares. Right now they are only a paper gain and not a consideration in your present tax calculations.
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