[OnToTheNextOne]

Hello All I was wondering if anyone could help me ,

Is the investment interest expense deductible only to the extent of

Gross investment income – investment expense in excess of 2% AGI

or

Gross investment income – non interest expense?

Any help would be very much appreciated!

[mcohen1993]

The value you put on Schedule A as an itemized deduction is limited to net investment income. Then from schedule A it is NOT limited to 2%.

Net Investment income is calculated on a separate form where investment expenses are not limited.

REG: 91!!
BEC: 80!!
AUD: TBA
FAR: TBA

In the order I plan to take the exams.

[Anonymous]

I thought Deductible Investment Interest Expense is subject to 2% AGI limitation (under Itemized Deduction items)?

P.S.
I remember encountering a sample MCQ where non-interest expense (8,000) is deducted from investment interest income (10,000). Investment interest expense of $5,000 was not included in the computation wherein the explanation says this item is carried forward indefinitely.

[Anonymous]

Alright, @Mcohen, for one second it got Investment Interest confused with Investment (custodial fees).
You're right. Investment interest is NOT subject to 2% AGI limitation just like home mortgage interest and mortgage insurance premiums. WHEW!

[OnToTheNextOne]

@AMOR D i remember that question too and it was one of the reasons I posted this, wouldnt the deduction be limited to 2k with 3k carried forward indefinitely?

[Author]

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