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    Websider's Avatar
    Websider Posts: 1, Reputation: 1
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    #1

    Apr 7, 2012, 11:29 PM
    Overseas resident mortgage interest deduction for foreign property on US tax return
    Hi,
    I am a US citizen and permanent resident of Australia, residing full time in Australia.
    I own my home in Australia and have a mortgage with an Australian bank (building society) to whom I pay mortgage interest.
    Trying to complete my US tax forms as I;ve just learned I am required to do despite my permanent residence in Australia.
    From reading IRS publications, this forum and elseshere, it looks like I should be able to deduct the mortgage interest as an itemised deduction on 1040 Schedule A.
    Because I pay it to a non-US bank, there is no form 1098 for the interest paid and it looks like I report this on Schedule A line 11 (instead of line 10).
    Because I reside fulltime overseas and the funds used to pay this mortgage are sourced entirely from overseas, it does not look like the 30% withholding issue some US residents with US income sources have had reporting foreign mortgage interest paid would be an issue for me.
    Can a tax expert please confirm my interpretation ?
    Thanks,
    Websider, Australia
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #2

    Apr 23, 2012, 11:17 AM
    Confirmed; the IRS makes NO attempt to collect on mortgage payments made to foreign banks if the owner of the property resides overseas.
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