Investment interest expense is deductible when incurred to purchase tax-exempt securities.

Name: Investment interest expense is deductible when incurred to purchase tax-exempt securities.
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Investment interest expense is generally deductible only to the extent of investment income. However, interest expense incurred to purchase tax-exempt securities is not deductible because the income from those securities is already exempt from tax.

Investment Interest Expense Is Deductible When Incurred to Purchase Tax-Exempt