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When is the investment interest considered as has been paid in the margin account? I will refer to my previous example:

[[ Example:
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 dividend.
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?]]

The total dividends are 140, interest is 120, but the margin loan has not been paid off at the end of tax year. My major points are:

can I count the first $50 dividend as "interest paid", even though there was no loan at the time of that payment;
if at the time of the didvdend payment interest accrued was less than the value of the payment, do I have to allocate parts of it toward principal.
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