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Deducting foreign mortgage interest on 1040
The question is this: The taxpayers are a US citizens who own real property (a condominium) in India. They work and live in the United States currently. They pay the bank interest and principal and real estate taxes. No 1098 statement is issued by the bank located in India. The home is there second home. It meets all the requirements of a home under IRS publication 936 except that the property is located in India. Is the interest and taxes deductible? Contrary question is this: when they sell the property in India hopefully as a profit, the taxpayer would pick up all the income on its worldwide income. So why would the interest and the taxes not be deductible on the 1040 and where is it written that it is not deductible?
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Yes, the interest and taxes ARE deductible under U.S. tax law.
The only hitch is that you may be required to WITHHOLD 30% of your monthly payment to the Indian bank to send to the IRS. It is most likely that the bank will NOT sanction such a withholding. |
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