| Mortgage interest on a second home is deductible on schedule A as an itemized deduction, even if the second home is located outside the U.S. The interest should be reported on Schedule A on the line that says mortgage interest not reported on Form 1098. However, if you reside in the U.S. and the lender is a foreign bank, then you are required to withhold 30% tax on the interest portion of the payments, unless a lower treaty rate applies. If you want to rely on the treaty, you need to obtain a Form W-8BEN from the foreign bank where the bank certifies that it qualifies for treaty benefits. In either case, you will need to also file Form 1042 and 1042-S reporting that you made interest payments to foreign persons. | 
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