[ojacobo]

I took on a loan on foreign currency from a foreign relative (personal) as a bridge-loan on my homestead. I will be paying it in full including acumulated interest and capital and I will likely incurr in a foreign exchange loss.
a)- are the interests deductible?
b-) is the currency exchange loss deductible?
c) - How are these declared?
d) how is the fact that the loaner is a foreign person (no SSN or TaxID) managed in the tax declarartion?
e) - What documents and back-up do I require?

[ebaines]

a) No - not deductible, UNLESS the contract that you had with your relative specifes that the property is collateral to secure the loan (the loan is "secured debt") and the loan is recorded per state law. You would also need to report your relative's Taxpayer Identification Number on schedule A of your return. See Publication 936 (2009), Home Mortgage Interest Deduction

b) No - why should it be?

c, d, & e) - are no longer issues based on the answers to (a) and (b).