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-   -   Real estate tax outside US (https://www.askmehelpdesk.com/showthread.php?t=175063)

  • Jan 21, 2008, 06:44 PM
    ADHAMNE
    Real estate tax outside US
    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!
  • Jan 22, 2008, 02:28 AM
    MukatA
    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.
  • Jan 23, 2008, 06:22 AM
    IntlTax
    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.
  • Jan 23, 2008, 08:53 PM
    AtlantaTaxExpert
    Agreed; my research concurs with IntlTax.

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