Yes, you can take an interest deduction for a foreign mortgage if the property is either your primary residence or a secondary residence. Just remember to report the interest portion only and in USD. Enter the information as though you received a Form 1098.
To enter your Mortgage Interest in
TurboTax Online or Desktop, please follow these steps:
- Once
you are in your tax return, click on the “Federal Taxes” tab
("Personal" tab in TurboTax Home & Business)
- Next click on “Deductions and
Credits”
- Next click on "jump to
full list" or “I’ll choose what I work on”
- Scroll down the screen until
to come to the section “Your Home”
- Choose "show more",
then Mortgage Interest, Refinancing and Insurance
It is OK to show your foreign mortgage interest under the 1098 section of Schedule A. Just be aware that if the IRS tries to match up your information with what the IRS has collected from the bank and there is no Form 1098, it may cause the IRS to question this interest deduction. If you are contacted by the IRS, you will just need to provide an explanation of your situation (that your mortgage interest is from a foreign bank and provide the IRS with the details of this loan)
