[tirk82]

Hi there folks,

So I just bought a home in Colombia, mortgage came from a Colombian based lender, who is not based in the USA. The home will not be generating any income whatsoever. I will be responsible to pay property taxes to the Colombian local municipality as well.

Do I have to report this to the IRS? Does the IRS tax me for any reason? Do I quality for any tax deductions on my foreign mortgage interest? What happens if I sell the home in the future, do I owe the US government money for that? Is my property worth reporting to the IRS in the end? What are the advantages and disadvantages and risks of reporting vs not reporting?

THANK YOU ALL FOR YOUR HELP!

[ebaines]

You don't report the purchase to the IRS, as there are no immidiate tax implications regarding the purchase of property.

Since the mortgage is through a non-US bank, and assuming they have'nt already sent you a 1099 form, you cannot deduct mortgage interest without going through some pretty onerous and impractical steps. You can deduct foreign real estate taxes paid.

When you sell the home you must report it and pay capital gains tax on any gain. The advantages of reporting the sale is that it keeps you out of jail. OK, that's a bit extreme - it keeps you from being audited, fined for tax fraud, and having to pay interest on what you would owe.