What is investment interest?
Interest paid or accrued on a debt that was incurred to purchase property held for investment.Property held for investment is any property that produces portfolio-type income, such as interest from annuities, stocks, bonds, CDs or savings accounts, etc
Investment interest is the interest paid on money borrowed to purchase investments such as stocks, bonds, mutual funds, and real estate. This interest can be deducted from your taxes if you itemize your deductions and choose to deduct investment interest expenses. Investment interest is different from other types of interest, such as mortgage interest or consumer loans, as it is not linked to the purchase of a physical asset like a home or car. Instead, investment interest is the cost of borrowing money to invest in assets that have the potential to generate income or appreciate in value over time. It is important to note that investment interest is only deductible against investment income and not against other types of income, such as salary or wages.
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