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Negative Interest Rate...

Please note that I am not a tax professional.

I have an offshore bank account on which the depository bank will soon start charging me a so-called negative interest rate, i.e. I will have to pay interest to the bank on my money deposited in it!

The bank account is duly disclosed to the IRS and FinCEN and I've always paid taxes on interest accrued on it.

I don't suppose that now that I must pay negative interest there is a way to deduct it from my tax liability, right? (The bank account is for personal use only...)

Kind of a silly question, but one never knows...

Reply to
tb
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I haven't done any research on this, but I would suspect you might be able to deduct this as investment interest subject to the usual rules. See the instructions for Form 4952.

Ira Smilovitz

Reply to
ira smilovitz

Investment interest expense presupposes a loan. I would treat it as a cost of doing banking with that entity. I would use Schedule A Line 23, Misc. Itemized Deduction. A cost to manage, conserve, or maintain property held for producing such income.

The above assumes that the funds are not related to any business.

Reply to
Alan

Alan's response (which makes more sense than mine) prompted me to actually do some research. The answer appears to be that there is no answer. In 2015, IRPAC (the IRS Information Reporting Program Advisory Committee) raised this issue requesting that the IRS issue guidance. See

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page 71 (page 7 of the pdf file). Ira Smilovitz

Reply to
ira smilovitz

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