How to report interest on foreign mortgage with no 1098 in 2022 Turbotax

Begin by entering the information as though you received the 1098:

1. Under the Federal menu, choose Deductions & Credits
2. Expand the menu for Your Home
3. Click Start/Revisit next to Mortgage Interest and Refinancing (Form 1098)
4. Enter the lender information
5. On the following screen, choose The seller is financing this loan and we didn't receive a 1098
6. Complete the information on the screens that follow

Save your proof of interest paid for at least 6 years after filing, along with your other important tax papers, in case of audit. 

Hi Patti

thanks a lot.

Do I have to include any document related to these foreign mortgage interests with my tax return?

Thanks

Luca

No. You do not include any mortgage documents with your tax return. As awesome Tax Expert @PattiF said, “save your proof of interest paid for at least 6 years after filing, along with your other important tax papers, in case of audit.”

Hi

I followed the indications from Patti but turbotax now asks me for either the SSN or the federal ID, which the foreign bank does not have. also, ther eseems to be no way to indicate that the bank if outside the US.

So, I am stuck at the page where I enter the foreign bank address and cannot proceed.

Is there another workable way to enter the foreign mortgage interest with no 1098?

Luca

You can deduct the mortgage on your main home or one second home if the debt is secured by the home. Follow these steps:

1. Go to federal deductions and credits
2. Select Mortgage Interest
3. Enter the name of the lender
4. Select Property type
5. Do any of these situations apply? Select none of the above
6. Enter USD for mortgage information, continue
7. Secured by property? select,
8. continue answering questions.

At no point do you need SSN or federal ID. When you return to the summary screen, it will show your bank and the interest.

Reference:

About Publication 936, Home Mortgage Interest Deduction

Yearly Average Currency Exchange Rates - IRS

@spartacoLink 

"On the following screen, choose The seller is financing this loan and we didn't receive a 1098"

when filling in this form, there is no option for banks outside of the US so will not allow finishing

It depends. Unless this is financed by a private-seller (other than a bank), choose none of the above rather than The seller is financing this loan and we didn't receive a 1098.  A 1098 is not necessary to claim mortgage interest and you are entitled to claim the interest regardless where your residence is located.

@tdeanpear 

I have tried the steps mentioned, but didn't work since the software it requires a US address and can't be left blank. 

To clarify, did you report this as a rental home or business property?

@hecantu23 

Hi DaveF1006 thanks for your response. In my case is neither rental nor business. It's a second home. I was able to capture the interest choosing "none of the above" option.

@hecantu23  

Yes, if it meets all the test. The loan must be an acquisition loan (one to purchase the home), and it must be secured by the home. The two home (main home and second home) limit applies in addition to the $1 million total debt limit. Interest on equity loans may also be deducted up to $100,000 of loan amount.

Of course, you must be able to itemize your deductions on Schedule A to take advantage of the mortgage interest deduction. Commonly the mortgage interest and property taxes alone are enough to propel you into exceeding the standard deduction and allowing an itemization of your deductions.

Lastly, the amounts must be in USD denomination which should be converted to USD based on spot rate on date paid.