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Subject:  Re: Interest paid to broker on margin loan Date:  5/9/2021  1:47 PM
Author:  alphab Number:  132653 of 133127

Sorry to return to this topic.

I checked my Form 4952 as prepared by TT. On Line 4f it works out short term capital gain by subtracting from the amount on Line 4d (which is the same as the total gain shown on Line 16 of Sch D) the amount on Line 4e (which in my case is the same as the net long term gain shown on line 15 of Sch D).

Line 4g is blank, so not opting to include long term capital gain. But on Line 6 it calculates Net Investment Income by adding 4c and 4f (and 4g which is blank), that is, short term capital gain is treated as part of Net Investment Income, at least for the purpose of calculating "Investment interest expense deduction".

This allows a much higher value of margin loan interest to be deducted as I happen to have quite large short term capital gains.

Did TurboTax calculate the deduction correctly, by including my short term capital gain in the Net Investment Income?

I will be grateful for a confirmation.

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