Investment Interest

Payment for the use of funds used to acquire assets that produce investment income. For example, Interest paid on loans used for investment purposes, such as to buy stock on margin. You can deduct this interest on Schedule A if you itemize, up to the amount of investment income (not including capital gains or dividends that qualify for the 0% or 15% rates) you report. The deduction for investment interest is limited to net investment income for the tax year.