Hi,

We have 2 rental properties in India which yields income as well as we still pay mortgage on those two properties. In which schedule do we report the income and deduct the mortgage for the rental properties.

Any insight into this is very much appreciated.

Thanks.
Bindu

You must use Schedule E to report the rental income and expenses. Be sure to use the 40-year depreciation schedule for overseas property.

If you need professional tax help with this, email me at [email protected].

If on this rental income you paid any taxes in India, file Form 1116 to claim foreign tax credit. Your U.S. Tax Return: U.S. Citizen or Resident with Foreign Income (http://taxipay.blogspot.com/2008/03/us-citizen-or-resident-with-foreign.html)

Yes, MukatA is correct; I should have mentioned the Foreign Tax Credit issue as well.