The Tax Rules on Margin Interests

104 60

Definition

  • Margin interest refers to money that investors pay to buy stock on margin. It is interest that a stockholder pays a broker to borrow money, using existing investments or cash holdings as collateral, to buy more investment products. Margin interest reduces the amount of profit that stock buyers make because they pay to borrow the money they invest. However, it also has tax implications that can sometimes make up for this loss.

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