Yes, you can deduct the interest expense from your margin account. If you have purchased taxable securities as investment interest, and you have paid the margin interest in 2017.
You can enter Investment Interest expense as follows:
- Go to Federal Taxes.
- Select Deductions & Credits
- Under Retirement and Investments, choose Investment Interest Expenses.
You can only deduct the portion that was used for investment purposes only. If you use any of the funds for personal such as home-improvements, down payment on car, etc. you may not deduct the interest expense allocated for personal use.
The following link is very helpful regarding deducting this expense:
https://www.irs.gov/pub/irs-pdf/p550.pdf
