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Old 08-03-2012, 01:25 PM
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Foreign Mortgage Interest deductible for US rental property

Hi there,

I'm a Canadian resident owning a condo in Miami. I used my Canadian home line of equity to purchase the condo then convert this home line to a 5 year mortgage using my Canadian home to secure the Miami condo. In other words, the condo is currently financed in Canada so I am incurring mortgage interest in Canada. My question is, is my foreign mortgage interest deductible against the Miami condo deductible on the 1040NR? The condo is currently rented and I have no intention of living in that condo until I retire (which is in 10 years or so). Thanks.



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Old 08-03-2012, 06:10 PM
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“ In other words, the condo is currently financed in Canada so I am incurring mortgage interest in Canada. My question is, is my foreign mortgage interest deductible against the Miami condo deductible on the 1040NR?”------>You may deduct the mortgage interest on the Condo in Miami on your Canadian return , NOT on your US return; you can deduct certain itemized deductions if you receive income effectively connected with your U.S. trade or business. You generally cannot claim deductions related to income that is not connected with your U.S. business activities .These deductions include state and local income taxes, charitable contributions to U.S. organizations, casualty and theft losses, and miscellaneous deductions. You can use Sch A of Form 1040NR to claim itemized deductions.If you are filing Form 1040NR-EZ, you can only claim a deduction for state or local income taxes. If you are claiming any other deduction, you must file Form 1040NR. You, as a Canadian resident( I mean nonresident alien) cannot claim the standard deduction on your US return on 1040NR.



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