IIE is deductible from taxes, and is usually used to deduct the interest paid on a margin loan used to buy taxable securities, when there is a gain to offset.
Investment interest expense is the term for interest which has been paid in order to hold an investment position. It comes into play when filing taxes. An individual can list interest expenses on a Form 1040. The most common place to incur an interest expense when investing is through the use of margin in an investment account.
Margin loans allow investors to hold more, or larger, positions with the same amount of capital, but they will be charged interest as long as the loan is outstanding. The same might go for short positions, which might also require margin (as margin itself describes the cash or equity balance which serves as collateral for the loan).
At the end of the year, if there are gains to report but interest was paid while waiting for the gains to materialize, the investor can write off the interest payments, similar to deductions available on mortgage loan interest.
Real estate investment properties are also eligible for investment interest expense deductions.
What is Mortgage Interest Deduction?
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Naked shorting means that the seller has not located or secured the security being short sold, and is in many cases illegal
The diluted earnings per share are earnings a co. would have if they changed all of their convertibles into common stock
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The cost of setting up a trust varies depending on the type of trust and its complexity, but generally speaking a trust will cost between a few hundred to a few thousand dollars
A Fibonacci Extension is the prediction of a trend’s extent after an initial push and a retracement has been seen
Divorce can be hard. Publication 504 walks through the various choices available to those who are divorced or separated
The Descending Triangle pattern has a horizontal bottom which represents the support level, and a down-sloping top line
A good investment performance calculator will give you the ability to input various cash flow scenarios and compute return
If you buy and sell securities, you may qualify for tax status as a ‘trader,’ which importantly may qualify you for certain business tax breaks
Explore five essential habits for successful investing - research, discipline, self-reflection, correction, and iteration.