Is there any tax deduction for home loan in other countries ?

Question by Leo: Is there any tax deduction for home loan in other countries ?
If a person carries a home loan in other country (other than US) is there any tax deduction(relief) given by IRS ? A part of his earning in US is being used to pay home loan EMI in other country.

Best answer:

Answer by Ken
Mortgage interest on a 2nd home is deductible on schedule An as an itemized deduction, even if the indorsed home is located outside the U.S. However, if you reside in the U.S. and the lender is a foreign person/bank, then you are required to withhold 30% tax on the interest portion of the payments, unless a lower treaty rate applies. Depending on the jurisdiction, a treaty may apply to reduce or eliminate the withholding tax. However, if you want to rely on the treaty, you need to obtain a Form W-8BEN from the foreign lender where the lender certifies that it qualifies for treaty benefits. In either inspect, you will need to also file Form 1042 and 1042-S described that you made interest payments to foreign persons.

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