[wombat53]

Hi - Am wondering abut Question 4a), "Deductible Home Mortgage Interest". My question is - is home mortgage interest paid on a FOREIGN home also deductible, or is this question related only to a US home, where we all know that Mortgage interest is deductible?
Many thanks

 

[Bevdeforges]

Home mortgage interest is deductible on your US tax return under the same conditions as it is in the US:

• the interest must be paid on a mortgage for your primary or secondary residence, whether located in the US or elsewhere
  
• you have to be itemizing deductions to deduct
  
• subject to the limitations on deductible home mortgage interest

As it says, use the worksheet on p. 14 of the instructions for form 1116. If you take the FEIE (i.e. form 2555 exclusion for earned income), you have to allocate your home mortgage interest between the income you are excluding from taxation and the income on which you're taking the foreign tax credit.
Cheers,
Bev

 

[wombat53]

Thanks Bev - Since I posted that question, I have read more Forums , and people seem pretty sure that , like all such deductions, it belongs on Sch A ,and that the entirety of Mortgage interest can be deducted (so long as the several conditions are met). That the property is in a foreign country is irrelevant. I only stumbled across it in the fine print of Instructions for Form 1116. Indeed, no-one (except me) ever mentioned it with regard to F1116, esp as this is primarily for a Credit against foreign taxespaid, vs. a deduction for income. Any ideas?