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New Member
posted May 31, 2019 9:02:35 PM

I have mortgage interest on a foreign property but can't figure out how to enter it. There only seems to be a process for entering interest when you have a 1099.

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New Member
May 31, 2019 9:02:36 PM

You will enter your qualified foreign mortgage interest as if you had a Form 1098.  

You can take both qualified foreign mortgage interest paid and foreign real estate taxes paid as an itemized deduction on your tax return.  You may only deduct the amounts paid in the current year .  (You would have to amend prior year returns to take interest and real estate taxes paid in prior years.)

According to the IRS, qualified foreign mortgage interest is as follows:

  • Debt that is incurred to acquire, construct or substantially improve the taxpayer’s main or second home, and
  • Debt that is secured by the home

You  will need to determine the interest portion of your loan (for example through a statement received from your foreign bank or an amortization table).  Retain the documents you used for your records.

Deductible real estate taxes are generally any state, local, or foreign taxes on real property imposed by local government in a uniform manner. 

To enter your mortgage interest in TurboTax Online or Desktop, please follow these steps:

  • Once you are in your tax return, type "mortgage interest" into search box on blue dashboard
  • Click on Jump to Mortgage Interest (in blue)
  • On the "Mortgage deduction summary" screen, click Add a lender
  • Enter lender information and on the "Let's get the details from your bank 1098 now" screen, enter your foreign amount paid for mortgage interest in Box 1.  (TurboTax has no separate screen to enter mortgage interest not reported on a Form 1098).

To enter real estate taxes paid:

  • Once you are in your tax return, click on the Federal Taxes tab ("Personal" tab in TurboTax Home & Business)
  • Click on Federal Taxes tab
  • Choose Deductions and Credits tab
  • Click on Show more down arrow next to Your Home (in blue to the right)
  • Click on Start button to right of Property Taxes

You will only be allowed to take these deductions if you itemize using Schedule A on your tax return.  If you don't have any other itemized deductions, TurboTax will deduct the greater of the standard deduction or itemized deductions. TurboTax will choose the one that lowers your overall tax liability.

The deductions will be taken in USD. You must translate foreign currency into U.S. dollars if you receive income or pay expenses in a foreign currency. In general, use the exchange rate prevailing (i.e., the spot rate) when you receive, pay or accrue the item.  Otherwise, you can choose to use the IRS' Yearly Average Currency Exchange Rates.