Tax Deductions: Investment Interest Deduction

Interest you paid on an investment loan may be deductible.

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Tax deduction: loan interest deduction

Interest paid on a loan used to purchase securities can be claimed as a tax deduction - up to $2500 .

Loan interest deduction: the basics

To claim any investment interest tax deductions, your income cannot exceed:

  • $55,000 if you are single
  • $75,000 if you file jointly

Also, the total interest paid can not be more than your investment income.

Use IRS Form 4952 and enter the investment loan interest deduction amount on Schedule A.

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Related IRS publications

Get more information about the investment interest tax deduction from IRS Publication 550. This publication also deals with another favorite subject, capital gains and losses.

Note: you will need an Adobe Acrobat Reader to view these publications, which you can get here.