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?