Get Identifying Number 97 72 Name(s) Shown On Return Part I 1 2 3 Total Investment Interest Expense 1 2

On Form 1041, you can claim deductions for expenses such as attorney, accountant and return preparer fees, fiduciary fees and itemized deductions. After the section on deductions is complete you'll get to the kicker – taxes and payments.

An investment interest expense is any amount of interest that is paid on loan proceeds used to purchase investments or securities. Investment interest expenses include margin interest used to leverage securities in a brokerage account and interest on a loan used to buy property held for investment.

Types of interest deductible as itemized deductions on Schedule A (Form 1040, Itemized Deductions) include: Investment interest (limited to your net investment income; see Publication 550, Investment Income and Expenses) and. Qualified mortgage interest including points (if you're the buyer); see below.

Any excess investment interest expense that is disallowed is carried forward indefinitely until net investment income is recognized. Form 4952 is used to determine the investment interest expense deduction.

One of the most common examples of investment interest expense involves the use of a margin loan at a brokerage. If you "go on margin" with your stockbroker, it means you're borrowing money from the firm to buy stocks or other investments. The interest you pay on that margin loan is qualifying investment interest.

To actually claim the deduction for investment interest expenses, you must itemize your deductions. Investment interest goes on Schedule A, under "Interest You Paid." You may also have to file Form 4952, which provides details about your deduction.

Investment expenses (other than interest expenses claimed on IRS Form 4952) are deducted as miscellaneous itemized deductions on Line 23 of Schedule A. To be deductible, these expenses must be ordinary and necessary expenses paid or incurred: To produce or collect income, or. To manage property held for producing ...