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2008 Tax Guide (8.56MB) Print this page
 Margin Interest Expense

Total margin interest expense charged to your account during 2008 is reported in the Summary of Transactions We Do Not Report to the IRS section of your Tax Information Statement.
 
A. MARGIN INTEREST EXPENSE
Margin interest expense may be characterized as investment interest expense, the deduction of which is limited to net investment income. This limitation is calculated on IRS Form 4952 (Investment Interest Expense Deduction). Margin interest expense must be paid the year in which it is deducted. If your investment interest expense is deductible, this is reported as an itemized deduction on IRS Form 1040, Schedule A, line 13.

The amounts shown in the example below assume no carryover of investment interest expense from 2007, and no disallowed investment interest expense during 2008. For illustrative purposes, $700 of net investment income was assumed on the sample tax form below.