Can margin loan interest be deductible?
September 26, 2008
Date: Wed, 20 Feb 2008
Hello Mr. Gray,
Does using a margin loan to make a down payment on a house qualify as a "taxable investment", qualifying the annual payments of interest for the margin loan to be tax deductible as investment interest expense?
Thanks for any insight,
Date: 09 Mar 2008
Assuming the house is a personal principal residence, margin loans to purchase the home would be a personal loan, and the related interest is not deductible. If the house is a rental, the related interest is deductible on Schedule E as a deduction against rental income and losses may be subject to the passive activity loss limitations.
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