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I love Interactive Brokers, but I'm trying to figure out why people use IB's debit card, drawing from margin. I know they have the best margin rates in the indu
by whitepoplar 8y ago
I love Interactive Brokers, but I'm trying to figure out why people use IB's debit card, drawing from margin. I know they have the best margin rates in the industry, but it's still something, and the margin interest isn't deductible if it's not used to buy securities.
Is there a particular tax advantage that I'm not considering? I'd love to know as this sort of stuff is like crack to me.
- purplerabbit 8y agoDrawing from margin prevents you from needing to sell and rebuy securities to free up $ as needed. This means no taxable events occur, so you don't have to deal with capital gains. It's also the cheapest possible credit you can obtain as a consumer. TBH it's so cheap that you can reasonably expect your investment returns to at least match it in the long run, so as long as you aren't drawing so heavily as to get an unhealthy leverage ratio