Tax Facts

7629 / Are interest expenses deductible if Treasury bills or short-term taxable corporate obligations are purchased with borrowed funds?

Updated: October 23, 2026 at 07:01 PM
Deduction of interest paid on amounts borrowed by a taxpayer to purchase or carry Treasury bills or short-term taxable corporate obligations may be subject to limitation and deferral. See Q 8045 for details.1 Certain short sale expenses (see Q 7529, Q 7530) may be treated as interest within this rule.2 Any deductible interest expense will also be subject to the general limit on otherwise allowable investment interest expense deductions (see Q 8040).




1.   IRC § 1282(a).

2.   IRC § 1282(c).


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