Have Int pd on Indian home loan for Tax year Apr 18 - Mar 19.. How can I calculate it for the calendar year 19 for US returns? Can I do avg of indian tax year 2018 and 19

[joshraj]

My Indian Bank provided the Interest Tax Certificate for Indian Tax Year Apr 2018 - Mar 2019. How can I report the Interest Paid on Foreign Loan based on the Calendar year for US returns? I can think of Two options:

1. Option 1 - Deduct the int paid for Apr 18 - Mar 19 on US Tax return for 2018. Next year deduct the int paid for Apr 19 - Mar 20 on US tax return for 2019. and so on..

2. Option 2 - Take the average of monthly Interest paid (X) in tax year Apr 17-Mar 18 and multiple by 3. Take average of Interest paid (Y) in tax year Apr 18 - Mar 19 and multiple by 9 and add both amounts (X+Y).

[pk]

Let me go over what I get is the situation-->

(a) you have a home  in India  with a mortgage through a local lender.

(b) this lender has provided you  document substantiating  mortgage interest collected for the Indian Tax years 2017/2018 and 2018/2019.

(c) For claiming the mortgage  interest on your 2018 US return, you need to allocate your interest payments  to 2018 calendar  from the Indian tax year.

As I see it you have two options in achieving this  --- your option (2) above will substantially achieve this  with some error but probably can stand a challenge  

OR 

you can get back to your records  of the monthly EMI payments and convert these to US $ at the then exchange rate.  I say this because  Indian lenders use  ( as I understand ) a variable rate  that can/do change from month to month and therefore can be easily computed using an excel spread sheet ( but not using excel functions  because these assume a fixed interest rate  ). Also in such a case change in exchange rate can be easily accommodated., as long as you know the outstanding Principle amount.  This is much more accurate method  but obviously takes more effort.

You definitely cannot use your Option(1).

Namaste ji