UK mortage for US tax

Forum|Forum|3 years ago
March 14, 2023
1 reply
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I just moved to US and my husband lives in the UK at the moment. We have a mortage for our UK flat in the name of both us. However, it is paid by my husband only. I have a few questions and hope someone can help.

1. Because I moved to US last year for a few months and I only fill in the Non-residental alien form, I assume I do not need to report anything about my UK mortage this year. Is it correct?

2. From the next year, do I need to report my UK mortage for the currency difference for the monthly mortage payment even it is paid by my husband not me? If my husband pay 1000 GBP per month. 300 GBP are interests. How do I report it to US to pay the tax for the currency difference? Is it based on the currency difference at the moment and the time we got the mortage? Do I need to report the half?

3. Or I only need to make the report when I pay a lump sum or when I do the refinance ?

4. Which tax form should I use in the turbotax? Does the tax rate based on my ordinary income tax rate at the moment or 37%?

Thanks for the help. It really confuses me..

TurboTax Deluxe Online

Best answer by MAK70

Many thanks. That is super helpful.

1. In summary, even the mortage has the name of mine, but my husband handles all the payment and live in there. I do not need to report anything with my mortage related.

2. Because my husband lives in the UK flat, we do not have any rental at all. I only have wage, interests from bank, UK bank accounts and one previous UK workplace pension fund (no contribution and no distribution at all from last year). I assume deluxe should be enough. (I need 9838 form)

Please give me the final confirmation of the last two statements or correct it. Many many thanks.

1. You do not have to report the mortgage because you did not make the payments.

2. Deluxe will be able to file your taxes- like I said, if there is anything TurboTax will let you know. Please do not forget the 9838 and the FBAR (if required).

Please come back and ask any questions, we are happy to help.

MAK70

1. Correct, nonresident aliens only have to report income from the U.S.

2. See Yearly Average Currency Exchange Rates. If you are not paying the mortgage, you cannot deduct any of the interest on your taxes.

3. If you can use the mortgage interest when you make a lump payment, you can deduct the interest paid at that time.

4. For the nonresident alien, you must use Sprintax, a TurboTax partner. See TurboTax partner of Sprintax.com. When you are ready to file as a U.S. resident, you can start in TurboTax for free- and as tax situations come up that require additional forms, you will be prompted and given options so that you do not have to pay for parts that you do not need.

Helen123Author

Many thanks. That is very helpful.

1. So, if I do not pay mortage or lump sum (done by my husband in the UK, not American), I do not report it to the IRS, right?

2. For my fourth question, I am asking about my next year report by turbotax. Hope you can give some details, thanks.

3. I heard a foreign mortgage repayment results in a foreign currency gain or loss. It may be some tax issue. Or should I just ignore it?

MAK70

1. Yes if your husband is maintaining the home in GB, you do not have to report on your U.S. tax return.

2. Next year, if you have a simple return, like wages, retirement or interest income, you will be fine with TurboTax Deluxe. If you have rental properties or Investments you would have to use TurboTax Premiere and if you have Self-Employment, you would need the TurboTax Self-Employed. See Compare TurboTax products.

3. Since you do not have to report the home, you would not have to worry about currency gain or loss. However, there are rare instances that there would be a currency fluctuation, but in general, if you pick a fixed date for the conversion, you would not have to account for it. (as long as your method is consistent, you do not need to report to IRS)