I am thinking of buying a home in India by availing a mortgage in an Indian Bank. I live here in USA. Is my mortgage interest deductible when I file my taxes in USA. This is my second home. I already own my primary home in USA.
2007-01-24 05:07:03 · 3 answers · asked by sramanathan13 2 in Business & Finance ➔ Taxes ➔ India
Yes, as a tax resident of the US, you are taxed on worldwide income. Therefore you can claim worldwide deductions. You can deduct the interest on your principal residence, plus a vacation home, as long as the total mortgage amount for both homes combined is less than the $1,100,000 cap. Since the Indian bank wouldn't be issuing you a Form 1098 to report the interest you paid, you would need to report it on the line on Schedule A used for mortgage paid but not reported on 1098.
Since the mortgage interest paid to an Indian bank would be reported in rupees, you would need to convert it to USD. Since the payments are made equally during the year, you can use the average exchange rate for the year.
2007-01-24 07:35:23 · answer #1 · answered by jseah114 6 · 0⤊ 0⤋
No. Deductible interest is a tax incentive for you to own a home in the US. Non-US homes do not give you a deduction. If you do business in India, there might be a "cost of business" deduction that you can take, but the interest is definitely not deductible.
2007-01-24 05:11:32 · answer #2 · answered by MR MONEY 3 · 0⤊ 1⤋
As a US citizen, you will record international earnings on your tax return. in case you're utilising form 2555 to exclude all your earnings, then you definately have not have been given a reason to itemize as your tax is already 0. if your tax invoice is *no longer* 0, then helpful, you itemize something you are able to to diminish the invoice.
2016-11-26 23:19:33 · answer #3 · answered by ? 4 · 0⤊ 0⤋