Is Mortgage interest deductible on in a foreign country home?
I am thinking of buying a home in India by availing a mortgage in an Indian Bank. I live here contained by USA. Is my mortgage interest deductible when I file my taxes in USA. This is my second home. I already own my primary home within USA.
Answers:
Yes, as a tax resident of the US, you are taxed on worldwide income. Therefore you can claim worldwide deduction. You can deduct the interest on your principal residence, plus a vacation home, as long as the total mortgage amount for both homes combined is smaller number than the $1,100,000 cap. Since the Indian bank wouldn't be issuing you a Form 1098 to report the interest you rewarded, you would need to report it on the line on Schedule A used for mortgage remunerated but not reported on 1098.
Since the mortgage interest paid to an Indian bank would be reported surrounded by rupees, you would need to convert it to USD. Since the payments are made equally during the year, you can use the average exchange rate for the year.
No. Deductible interest is a tax incentive for you to own a home surrounded by the US. Non-US homes do not give you a deduction. If you do business contained by India, there might be a "cost of business" deduction that you can pocket, but the interest is definitely not deductible.
Related Questions:
Currently, what is the going interest rate for first time home mortgages?
I talked to two other banks - one I enjoy a checking account with and another I enjoy a credit card with. The my checking account sandbank told me I would have better luck somewhere else. The bank who I own my...
Answers:
Yes, as a tax resident of the US, you are taxed on worldwide income. Therefore you can claim worldwide deduction. You can deduct the interest on your principal residence, plus a vacation home, as long as the total mortgage amount for both homes combined is smaller number than the $1,100,000 cap. Since the Indian bank wouldn't be issuing you a Form 1098 to report the interest you rewarded, you would need to report it on the line on Schedule A used for mortgage remunerated but not reported on 1098.
Since the mortgage interest paid to an Indian bank would be reported surrounded by rupees, you would need to convert it to USD. Since the payments are made equally during the year, you can use the average exchange rate for the year.
No. Deductible interest is a tax incentive for you to own a home surrounded by the US. Non-US homes do not give you a deduction. If you do business contained by India, there might be a "cost of business" deduction that you can pocket, but the interest is definitely not deductible.
Related Questions:
Currently, what is the going interest rate for first time home mortgages?
I talked to two other banks - one I enjoy a checking account with and another I enjoy a credit card with. The my checking account sandbank told me I would have better luck somewhere else. The bank who I own my...