Can someone explain how my investment interest expense of around $80,000 is now shown as deductible, after I accepted TT's offer to treat $80 K of CG as inv. income?

Forum|Forum|3 years ago
March 30, 2023
1 reply
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I know investment interest expenses is deductible only to the extent one has interest and inv income (not counting qualified dividends). I am not clear what I am giving up by this election to treat CG as inv income.

TurboTax Premier Online

GeorgeM777

You may not be giving up anything, but rather gaining a greater deduction. Investment interest expense is an itemized deduction and therefore, it is entered on Schedule A. You are correct in that you can deduct your investment interest expense up to the amount of your net investment income. Thus, if you have $80,000 of interest expense and a comparable amount of capital gains, it may be advantageous to claim the interest expense as well as any other itemized deductions you may have.

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