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Thanks for your response. My question is if all securities in the account qualify for deduction, or only the ones that brought your balance below zero.
I have 5000 cash in the margin account. I buy security XYZ for 4000. In 10 days the securuty generated $50 dividend. Then in 2 months I buy security ABC for 2550 dollars. My balance goes to (1500) negative. In 1 month XYZ pays another $50. Then ABC pays 40 dollars divident. Assuming that by the end of tax year there are no more dividends and margin interest was $120 dollars, how much of this is investment interest I can deduct?

I hope it is a complete example...
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