Buy stock on a credit card?

Question: Are there any circumstances where financing a common stock purchase with non-deductible debt, such as credit cards and lines of credit, is fully tax-deductible? – M.C.


Technically, the interest on most loans that are incurred for investment purposes is tax deductible. There are some grey areas, however borrowing against a line of credit is generally regarded as a legitimate source of financing for tax purposes, as long as the money is invested in securities that generate income or could do so in future. Common stock in publicly-traded companies usually qualifies.

I would never advise using a credit card balance to finance an investment portfolio because of the very high interest rate that is charged. – G.P.