Andrew_365

I'm entering my first tax cycle as a full year tax resident in the US and when filing I am required to disclose investments outside of the US.

I have a house in the UK mortgage and I am wondering if I have to declare the full value of the house or only the equity portion?

This will be the difference in being above / below threshold.

mrken30

Is this a rental property or primary residence?

If you're talking about rental property depreciation. It will be the building value, normally around 80% of the purchase price, but may vary.

If primary residence, it will be the full price purchased and sold.

nun

No need to disclose foreign real estate or mortgages unless the real estate is rented out or producing income or owned by something like a foreign trust. Also there's no need to report a mortgage unless it is something like and endowment mortgage. If you have capital gains then obviously they need to be reported and also exchange rates taken into consideration.

mrken30

I believe you can deduct the mortgage interest from your taxes. I am not sure how that works for overseas mortgages.

Cook_County

Most US residents would want to deduct mortgage interest.

nun

This is true, but there is no requirement to tell IRS anything more about it other than entering the interest as part of your deductions.

AmanSood

Another consideration is the rental income. Is the house in the UK being rented out? If so any rental income would still be taxable in the UK. From a US perspective, being a US resident you could claim a tax credit in the US on tax paid in the UK.

ubernathan

You may deduct the mortgage interest for your *residence*.

You may include the mortgage interest for your non-residences in any P/L accounting of their rental income.

mrken30

So no deductions for second homes. Just primary residence and rental properties.

Cook_County

But the IRS will still want you to recognise foreign currency gains on any foreign currency mortgages no matter how many residences you have.

Mercury39

Deductions allowed for 2nd homes as well. Good explaination here