Fillable Form 4952 - Investment Interest Expense Deduction

Form 4952 (2015)

Page

Do not reduce the amount of qualified dividends on Form 1040, line

to royalties, enter that part on Schedule E (Form 1040). Also, if any part

9b (or Form 1041, line 2b(2)), by any part of the amount on line 4g.

of the interest is attributable to a trade or business that is not a passive

activity, enter that part on the schedule where you report other

Note. The amount on line 4g is generally treated as being attributable

expenses for that trade or business.

first to net capital gain from property held for investment (line 4e), and

Estates and trusts. Enter the amount from line 8 (excluding any amount

then to qualified dividends (line 4b). This treatment results in the least

included on Form 6198, line 4—see below) on Form 1041, line 10.

tax being figured for Form 1040, line 44 (or Form 1041, Schedule G, line

However, if any part of the interest is attributable to a trade or business

1a). However, you can treat less of the amount on line 4e as attributable

that is not a passive activity, enter that part on the schedule where you

to line 4g and more to line 4b. You may want to do this if you are filing

report other expenses for that trade or business.

Form 1116, Foreign Tax Credit, as your tax after credits may be lower in

Form 6198. If any of your deductible investment interest expense is

certain cases. To do so, enter on the dotted line next to line 4e “Elec.”

attributable to an activity for which you are not at risk, you must also use

and the part of line 4e that you elect to treat as being attributable to line

Form 6198, At-Risk Limitations, to figure your deductible investment

4g (do not enter less than the excess of line 4g over line 4b). You will

interest expense. Include the part attributable to the at-risk activity on

use this smaller amount instead of the amount on line 4e when figuring

Form 6198, line 4.

your tax.

Alternative minimum tax (AMT). Deductible interest expense may be

an adjustment for the AMT. For details, see Form 6251, Alternative

Generally, you must make this election on a timely filed return,

Minimum Tax—Individuals, or Schedule I (Form 1041).

including extensions. However, if you timely filed your return without

making the election, you can make the election on an amended return

Paperwork Reduction Act Notice. We ask for the information on this

filed within 6 months of the due date of your return (excluding

form to carry out the Internal Revenue laws of the United States. You

extensions). Write “Filed pursuant to section 301.9100-2” on the

are required to give us the information. We need it to ensure that you are

amended return and file it at the same place you filed the original return.

complying with these laws and to allow us to figure and collect the right

Line 5

amount of tax.

Investment expenses are your allowed deductions, other than interest

You are not required to provide the information requested on a form

expense, directly connected with the production of investment income.

that is subject to the Paperwork Reduction Act unless the form displays

For example, depreciation or depletion allowed on assets that produce

a valid OMB control number. Books or records relating to a form or its

investment income is an investment expense.

instructions must be retained as long as their contents may become

material in the administration of any Internal Revenue law. Generally, tax

Include investment expenses reported to you on Schedule K-1 from a

returns and return information are confidential, as required by section

partnership or an S corporation.

6103.

Investment expenses do not include any deductions used in

The time needed to complete and file this form will vary depending on

determining your income or loss from a passive activity.

individual circumstances. The estimated burden for individual taxpayers

If you have investment expenses that are included as a miscellaneous

filing this form is approved under OMB control number 1545-0074 and

itemized deduction on Schedule A (Form 1040), line 23, the 2% adjusted

is included in the estimates shown in the instructions for their individual

gross income limitation on Schedule A (Form 1040), line 26, may reduce

income tax return. The estimated burden for all other taxpayers who file

the amount you must include on Form 4952, line 5. Include on line 5 the

this form is: Recordkeeping, 39 min.; Learning about the law or the

smaller of: (a) the investment expenses included on Schedule A (Form

form, 12 min.; Preparing the form, 24 min.; and Copying,

1040), line 23, or (b) the total on Schedule A (Form 1040), line 27.

assembling, and sending the form to the IRS, 13 min.

If you have comments concerning the accuracy of these time

Part III—Investment Interest Expense Deduction

estimates or suggestions for making this form simpler, we would be

Line 8

happy to hear from you. See the instructions for the tax return with

Individuals. Generally, enter the amount from line 8 (excluding any

which this form is filed.

amount included on Form 6198, line 4—later) on Schedule A (Form

1040), line 14, even if all or part of it is attributable to a partnership or an

S corporation. However, if any part of the interest expense is attributable

Form 4952 - Investment Interest Expense Deduction - 2015 Page 4

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