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ADHAMNE
Jan 21, 2008, 06:44 PM
I am working in US on H1B visa. Last year I bought real estate in India and I pay mortgage on the same. Can I add mortgage interest in tax deduction?
Thanks!

MukatA
Jan 22, 2008, 02:28 AM
No, if this is a land.
Mortgage on your first home and second home is deductible as itemized deduction. Is this your second home?
You itemize only if your itemized deductions are more than the standard deduction.

IntlTax
Jan 23, 2008, 06:22 AM
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. However, if you reside in the U.S. and the lender is a foreign person/bank, then you are required to withhold 30% tax on the interest portion of the payments, unless a lower treaty rate applies. Depending on the jurisdiction, a treaty may apply to reduce or eliminate the withholding tax. However, if you want to rely on the treaty, you need to obtain a Form W-8BEN from the foreign lender where the lender 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.

AtlantaTaxExpert
Jan 23, 2008, 08:53 PM
Agreed; my research concurs with IntlTax.