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Before making a major financial decision you
should consult a qualified professional.
Setting up the Brokerage Account When
Borrowing to Invest
If you borrow to invest, set up a separate brokerage
account to hold the investments that you purchase with the borrowed funds (the leveraged
investments).
This is the easiest way to ensure a clear paper trail to the borrowed funds, and
will save you a lot of record keeping. This is necessary even if you
already have a margin account with a brokerage, and you want to use the margin
being provided by stocks you have in the other account. The brokerage can
link the accounts so that they use a combined margin, and the stocks purchased
on margin can be kept in a separate account.
Tax Tip: Keep your
leveraged investments in a separate brokerage account from your
non-leveraged investments, to ensure
a clear paper trail for interest deductibility.
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substitute for professional advice. Each person's situation differs, and
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site to your best advantage
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