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    gagaliya's Avatar
    gagaliya Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Apr 28, 2009, 10:28 AM
    Foreign real estate investment tax
    Hi I have a very specific situation, if any tax expert can help, will be greatly appreciated thank you!

    1) I am a us citizen living and working in the us
    2) Bought a condo in shanghai china, the cost is $400k, with a $320k mortgage from HSBC
    3) There is very little to no real estate taxes in china, so that's not a concern.

    Question: Will I be able to deduct the mortgage interest paid on my tax return? No one seem to have a clear answer when the mortgage is on a foreign real estate property.

    Thanks again!
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #2

    Jun 12, 2009, 11:57 AM
    If this condo is your first or second, then, yes, you CAN deduct the mortgage interest. The fact that it is in China is irrelevant.
    IntlTax's Avatar
    IntlTax Posts: 831, Reputation: 23
    Tax Expert
    		  
    #3

    Jun 13, 2009, 04:53 AM

    I agree with ATE. Note you may have currency gains or losses on repayment of the loan if it is not denominated in U.S. dollars. Currency gains are taxable income. Currency losses are non-deductible personal losses. It depends which direction the currency swings.
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