Loan Interest Deductible - On a loan against my stocks?

Financial Planning Tax Strategies
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We had obtained a loan against our stocks in April, last year (2024). So, far, the 5.99% interest has not been paid. It will be due in April of this year (2025.) The 1 year loan will close out and we will then pay the loan plus the annual interest due. Since the interest will not be paid in 2024, obviously, it is not deductible. But, will it be deductible on my 2025 taxes? If it will be… can you please let me know which IRS form? Thanks for any info.

2

A margin loan?

If it’s a margin loan and you can itemize, it will be deductible. Keep in mind that the 2025 standard deduction for MFJ is $30,000, and if you’re both over 65, it’s $33,200. A 5.99% annual interest rate would only generate $30k in interest if you borrowed more than $500k ($33,200 would require borrowing more than $554k), so depending on how much you borrowed, you may need other deductions to get any advantage from itemizing.

Itemized deductions are on Schedule A.

AJ

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Thanks AJ. We sold several shares of stock in 2024, so we will definitely itemize. Also will be doing the same in 2025, so will itemize for that year also. So, this interest deduction will figure into all that. Thanks for all your help.

Footsox

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Please educate the rest of us. What about selling stock allows you to itemize?

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I believe he’s mixing up things as stock sales would go towards Capital Gain Income/Loss, Schedule D. totally separate from Schedule A that deals with itemization.

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Itemizing has nothing to do with the sale of stock. It has to do with your deductible expenses. You need to look at the instructions for Schedule A 2024 Instructions for Schedule A to see what can be itemized.

AJ

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