I am looking to buy a Florida Condo and I am a Canadian Resident. In order to finance it, I will refinance a rental property I have here in Ontario. Since I plan on renting out the Florida Condo, I need to submit my annual tax return in the US and then here in Canada. Can I still deduct my interest paid on the mortgage against the US Condo for the portion of the funds that are applicable to the US Condo? I don't want to lose that tax deduction.
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Tax Professional Answers
Chuck Heyde, CPA, CGMA
Yes, you can claim Canadian mortgage interest used to finance a Florida condo on Sch A line 11 of your US tax return.
Chuck Heyde, CPA, CGMA
www.GEMMS.us
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557 weeks ago
Chuck Heyde, CPA, CGMA
www.GEMMS.us
Christina Hansen
If you elect to have your Florida Condo rental treated as a US trade or business, a portion of your Canadian mortgage interest may be used to reduce the profit or increase the loss, subject to certain limitations. The advantage to claiming the expense on Schedule E rather than Schedule A is the potential for a loss carryover that will ultimately be used to offset hoped for future gains or profits. The disadvantage to placing on Schedule A is classification as "Investment interest" rather than home mortgage interest.
Christina Hansen, CPA, CGMA
www.YOURTAXEDGE.com
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554 weeks ago
Christina Hansen, CPA, CGMA
www.YOURTAXEDGE.com