Is mortgage interest on a foreign home loan deductible?

Forum|Forum|6 years ago
May 31, 2019
3 replies
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My primary home is in India on which I have a loan and pay interest. Is the interest deductible?

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Best answer by JonathanR

Hello rajarshim

Interestingly enough, the US tax code makes no substantive distinction between United States based real estate and real estate in a foreign country, when it comes to the question of being able to deduct mortgage interest or property taxes. In point of fact, the rules for being able to deduct either are the same.

Therefore, in order to proceed mechanically in TurboTax, just make your entries in the deductions section as though the Indian home were your home in the United States.

Here is a well-written article on this exact topic that you may additionally find interesting:

http://www.taxsamaritan.com/tax-preparation/foreign-mortgage-interest-deduction/

This information was provided by TurboTaxGeoffreyG , TurboTax Employee; EA, MBA

Thank you for using Turbo Tax.

haaslandguy

Employee

I have paid taxes for the past two years and not taken the deduction because I was not aware I could do this in a foreighn country...can I deduct both years this year?

AnuragObulam

Hey,

Just trying to figure out how you claimed deductions for the 2 years that you missed on your Mortgage Interest for your home in India. I'm in a similar situation and it would be helpful to understand what you did.

Thanks in advance!

AbrahamT

No, you cannot pickup the missed interest expense as a deduction for your home in Indiana this year. The only other option you would have is to amend the prior years returns to reflect those expenses. You would have to figure out how much of an additional savings on your prior years tax liabilty you would benefit by picking up the additional expenses. The time and costs of preparing these amended returns may not even be worth your while.

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bhirche

Employee

How do you claim the deduction when the lender is not a US bank but a foreign bank?

JonathanRAnswer

Employee

Hello rajarshim

Therefore, in order to proceed mechanically in TurboTax, just make your entries in the deductions section as though the Indian home were your home in the United States.

Here is a well-written article on this exact topic that you may additionally find interesting:

http://www.taxsamaritan.com/tax-preparation/foreign-mortgage-interest-deduction/

This information was provided by TurboTaxGeoffreyG , TurboTax Employee; EA, MBA

Thank you for using Turbo Tax.

rajarshimAuthor

Employee

Hi Geoffrey, This was very helpful. I have a home in the US which is a rental property. I am already claiming interest on loan for it and relevant property tax as deductible. Can I deduct interest on my India home in addition to that? Thanks.