An interest-ing investment deduction: Financial News - Yahoo! Finance

An interest-ing investment deduction: Financial News - Yahoo! Finance: "Bankrate.com
An interest-ing investment deduction
Wednesday April 5, 6:00 am ET
Kay Bell

Twenty years ago, taxpayers found that the various interest charges they paid on everything from mortgages to credit card balances to auto loans provided them a bit of a tax break. They could deduct that interest when they filed their returns.

Most interest deductions disappeared in 1986, when lawmakers overhauled the tax code. Now, the only remaining interest write-offs are for amounts paid on mortgage, student and investment loans.

While millions still claim the mortgage-interest deduction every year, the investment-interest break is generally overlooked. But for some filers, it could provide additional tax savings.

What counts as investment interest?
The first step to claiming this deduction is to determine whether you have, in the eyes of the Internal Revenue Service, investment interest.

This deduction is typically used by people who borrow money to buy stocks, bonds and other equities. Others buy investments on margin; that is, they borrow money from their broker to make purchases. The amount paid on that margin account is investment interest.

But the deduction can be used for other investments. And this is where it gets tricky.

'People don't understand what it means,' says Cindy Hockenberry,"