You would still have to enter it in the same place, on Schedule A. Foreign property
The IRS lets you deduct your mortgage interest, but only if you itemize deductions. You can't deduct the principal (the borrowed money you're paying back).
In addition to itemizing, these conditions must be met for mortgage interest to be deductible:
- The loan is secured, which means the lender has some kind of guarantee of payment, usually in the form of property. If a borrower defaults on payments, the lender can seize the property that’s securing the loan. If you’re buying or refinancing a home, especially if it’s your first home, the loan is usually secured by the home you’re buying or refinancing.
- The home with the secured loan must have sleeping, cooking, and toilet facilities.
- The debt can’t exceed $750,000 (or $1,000,000 if the loan was taken before December 16, 2017) to get the full deduction.
- You or someone on your tax return must have signed or co-signed the loan.
- If you rented out the home, you must have used the home more than 14 days during the tax year or 10% of the number of days you rented it out, whichever is greater.
Mortgage interest is usually reported on Form 1098, Mortgage Interest Statement. After you enter your 1098 in TurboTax, we'll ask a series of follow-up questions to make sure you're qualified to take the deduction.
For tax years 2018 through 2025, you can only deduct the interest from the amount of your loan that was used to buy, build, or improve the home that it’s secured by.
From VictoriaD75:
Begin by entering the information as though you received the 1098:
- Under the Federal menu, choose Deductions & Credits
- Expand the menu for Your Home
- Click Start/Revisit next to Mortgage Interest and Refinancing (Form 1098)
- Enter the lender information
- On the following screen, choose The seller is financing this loan and we didn't receive a 1098
- Complete the information on the screens that follow
