Is pledged asset line interest tax deductible towards capital gain if used to pay a down payment for a new house

Forum|Forum|1 year ago
January 29, 2025
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if I borrow against some US securities and pay interest for it, the proceeds are used to pay down payment for a new primary residence, is the interest of the loan(not the mortgage) considered investment interest and deductible against capital gains?

thanks

ItsDeductible Online

ThomasM125

No, the interest would not be investment interest since the funds borrowed were not used to acquire investment property. Your home is a capital asset since you use it for personal purposes, it is not investment property.

Also, investment interest is only deductible against investment income as an itemized deduction. As such, it is not deductible for capital gains purposes. You can learn more from this article from TurboTax .

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