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i thought i could deduct margin interest costs

post #1 of 15
Thread Starter 

I tried to deduct my margin interest costs but it says thats an itimized deduction and since im claiming the standard deduction does that mean i cant claim the margin interest costs?

 

If so, thats not really fair since that takes away from my gains i would think that it would be deductable.

 

I am using taxactonline.com  

 

It doesnt make much sense that i would have to pay taxes on gains that dont show the margin interest cost because thats not the real amount of money i made if i lost money from paying interest.

 

 

 

 

post #2 of 15

I don't know your answer, however I would contact there customer service and ask their opinion if you are looking for a quick answer. I use turbotax and there customer service are knowledgeable.

post #3 of 15
Quote:
Originally Posted by Nate01 View Post

I tried to deduct my margin interest costs but it says thats an itimized deduction and since im claiming the standard deduction does that mean i cant claim the margin interest costs?

 

If so, thats not really fair since that takes away from my gains i would think that it would be deductable.

 

I am using taxactonline.com  

 

It doesnt make much sense that i would have to pay taxes on gains that dont show the margin interest cost because thats not the real amount of money i made if i lost money from paying interest.

 

 

 

 



If you don't itemize deductions how would you expect to be able to deduct this one? Unless I'm missing something either itemize or don't. Your choice.

 

post #4 of 15
Thread Starter 
Quote:
Originally Posted by BobK View Post



If you don't itemize deductions how would you expect to be able to deduct this one? Unless I'm missing something either itemize or don't. Your choice.

 

 

so if i use the standard deduction i cant claim margin interest correct?

 

I dont see how that is fair, im paying taxes on gains that are higher then my actual gains because of the interest i had to pay to my broker.

 

 

 

 

 

post #5 of 15

lol didnt you ask another question which i said get a CPA .. its like 100-200 dollars for them to do everything.

You tell them this and they say okay or no.  I had the IRS come after me for 2009.. so it pays off.

or atleast ask someone like a CPA or the tax software people..

 

and yes that is correct about the interest to your broker, thats margin; but should be the same classification as a commission cost. Its a itemization on your trades.. (i think)

 

post #6 of 15

Definitely deductible it's part of commission costs. It's interest on a loan you took to acquire those gains.

post #7 of 15

Do you guys understand he says he's not itemizing deductions?

post #8 of 15

Do you understand thats why i say go get a CPA .. laughing.gif

post #9 of 15
Quote:
Originally Posted by mjoke View Post

Do you understand thats why i say go get a CPA .. laughing.gif



 

LOL. What do we call it. Saving to lose? Like you I was audited about 30 yrs ago. Got a CPA and they haven't bothered me since and I also told the CPA if there was an audit he goes in, not me.

post #10 of 15

Nate, I'm getting out of this one. Mjoke has given you the best advice. Get a CPA and I don't mean H&R Block. It may save you many dollars and much trouble. It's a necessary expense.

post #11 of 15
Quote:
Originally Posted by BobK View Post

Nate, I'm getting out of this one. Mjoke has given you the best advice. Get a CPA and I don't mean H&R Block. It may save you many dollars and much trouble. It's a necessary expense.



H&R did my taxes a few years ago.  IRS sent me a bill for $10k eek.gif  f' them

post #12 of 15

LOL.. i can see that if they went through all your trades or you were in an audit.

 

IRS came to me for 2009, which they wanted 4K more due to some issue with the buying prices.. gave all the info to my CPA signed a form and their atty delt with it.

No charge and turned into a refund.  .... I always asked him why do i pay you 200 to do something which i did my own taxes forever. This was one of the reasons.

Quote:
Originally Posted by Crazed98 View Post



H&R did my taxes a few years ago.  IRS sent me a bill for $10k eek.gif  f' them



 

post #13 of 15


yep.. even if its not worth it because of your W2s or 1099s...  if you trading the market heavily or medium .. i would totally get one.

mines a russian :)

Quote:
Originally Posted by BobK View Post



 

LOL. What do we call it. Saving to lose? Like you I was audited about 30 yrs ago. Got a CPA and they haven't bothered me since and I also told the CPA if there was an audit he goes in, not me.



 

post #14 of 15

It doesn't count in your cost basis. It is deductible against investment income (which does NOT include long term capital gains), and you have to itemize to take it, though you can carry it forward to a future year without itemizing. 

 

This is a good article that explains it better than me:

 

http://www.fool.com/taxes/2000/taxes000721.htm

post #15 of 15

If your itemized deductions do not exceed the standard the deduction then it benefits you to use the standard deduction

Hence, it's either one or the other.  

 

 

Standard Deduction Amounts for 2013

Standard Deduction Amounts for 2012

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