Q: If I have a mortgage on my house in my country and use the money to purchase a rental property in the U.S., may I deduct the interest on my U.S. tax return?
A: No, you may not take the mortgage interest as a deduction. The mortgage must be on your rental property.
Q: What tax would I be liable to pay if I sold my rental property?
A:Calculating the tax due on the sale is very complicated and must be specifically and individually addressed on a situation by situation basis. Factors dependent upon such calculations include (but are not limited to) how long you have owned the property before the sale, how much depreciation you have taken on the property in prior and current years, your tax bracket, etc. Unfortunately, with the sale of real property, there is no “rule of thumb”. It is extremely important you seek competent tax advice from a qualified CPA firm to calculate that gain.
Disclaimer:
Any tax advice contained in the body of this letter
was not intended or written to be used, and cannot
be used, by the recipient for the purpose of avoiding
penalties that may be imposed under the Internal
Revenue Code or applicable state or local tax
law provision
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