foreign home mortgage interest deductible and taxes paid while closing

Forum|Forum|1 year ago
February 10, 2025
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Hi, I purchased a home in India in 2024, and the property is financed through a mortgage loan from a foreign bank (based in India). I paid interest on this loan in 2024, and the property is not being rented. Can I deduct the interest paid on this mortgage when filing my US tax return? If so, how should I enter this information in TurboTax Premium?

Additionally, I already have a home in the US with a mortgage and interest paid, which is being deducted as a primary home.

Also, I paid taxes during the home closing in India. Can I deduct those taxes? If yes, how should I enter those in TurboTax as well?

TurboTax Premier Online

DaveF1006

Yes, you can deduct mortgage interest for a home you own in India. You may also enter property taxes paid with the loan.

To enter both mortgages and property taxes in your Turbo Tax return:

Click Federal Taxes
Click Deductions & Credits
Click Your Home > Mortgage Interest, Refinancing, and Insurance > Start
This will assume that you have a 1098. if you don't have one, it's ok. You can still enter information without it.

You would enter both homes in this section individually. In entering your primary residence first, there will be a section where you will indicate this is your primary home. Then there will be a page where you will list the mortgage interest paid in Box 1, outstanding mortgage outstanding in Box 2, mortgage origination date in Box 3, and property taxes between Box 5 and Box 7.

After entering this information and completing the section, there will be a Home Loan Deduction Summary page where the information from the primary loan is entered. Now select add a lender to enter your foreign home information. Make sure to record this entry as a second home and then finish out the section

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t9filerAuthor

Hi @DaveF1006, Thanks for your response. The taxes I was referring to are stamp duty(registration fees) and sales tax. So, are these deductible while filing tax returns in US?