Page 22 - Interest Income - Individuals Handbook

Money borrowed to invest in certificate of deposit

Understanding interest income is required for tax filing.

 The interest expense you pay on money
borrowed from a bank or savings
institution to meet the minimum deposit

required for a certificate of deposit from
the institution and the interest you earn

on the certificate are two separate items.
 You must report the total interest income
you earn on the certificate in your income.

 If you itemize deductions, you can deduct
the interest you pay as investment

interest, up to the amount of your net
investment income.
 See Interest Expenses in chapter 3 of Pub.

550.

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