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Thanks to all who responded. So if the balance transfer fee isn't deductible, then I assume that I need to prorate the portion of interest that is deductible (since the balance transfer fee simply gets added to the balanc and incurs interest).

E.g. if I borrow $10000 and pay a $200 balance transfer fee I could deduct 10000/10200 * 100% = 98% of the interest as investment interest expense. Is this correct?

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