Jmaster911

Does anybody know if I can claim any sort of US Tax break for the mortgage I still have in the UK. We are about to sell after 2 years but it would be nice to offset some to my losses

armstrongsoo

No, you cannot deduct mortgage interest from overseas.

Furthermore, loss in selling your personal residence is not tax deductible either.

Very sorry.

Peter Newton

Assuming your principal residence is in the US:

1. If the property in the UK is vacant, you may be able to treat it as your second home and deduct the mortgage interest

2. If the property in the UK is rented out, you can deduct the mortgage interest as an expense against the rental income. If you generate a loss for tax purposes you may be able to deduct some or all of this against other income (subject to the passive activity loss rules)

Finally when you sell the UK property, you may have a foreign exchange gain or loss when paying off the mortgage.

armstrongsoo

I stand corrected. I contacted the IRS today and confirmed that the fact that the property is outside of the USA does not preclude mortgage interest from being deducted, as long as it meets the other requirements as if the property was in the USA.