USA Purchase of Home Financed with Margin Loan

[fjd_98]

My client put her house on the market in 2018, and moved into a smaller home which she financed with a margin loan on her investment account. The intent was to sell the previous home quickly and pay off the margin loan. The house has not sold and is still on the market18 months later. How can she deduct the interest on the margin loan?

 

[Werner Reisacher]

In general, interests on margin loans are tax-deductible, as long as
- the funds are used for income-generating investment purposes
- the taxpayer files for itemzed deductions