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The articles only mention dividends and income because you can only deduct investment interest to the extent you have investment income which is taxed at ordinary rates. This is interest and non-qualified dividend income (and some less common items). However, you can choose to treat some or all of your qualified dividends and long-term capital gains as investment income by agree to let them be taxed at ordinary tax rates in lieu of the preferable long-term capital gains rates. You do this by including them on line 4g of Form 4952.

I'm not aware of any method to determine whether treating the capital gains as investment income on Form 4952 is advantageous other than actually running the numbers and seeing what your final tax liability is.

There is no tax linkage between the margin loan(s) and the specific shares purchased with the borrowed money.

Ira
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