(MONEY Magazine) – Q. My niece made a $22,000 down payment on a house, and the seller's lawyer put the money in an escrow account. However, the sale was delayed seven months. When my niece finally closed on the house, she didn't receive any interest on her down payment money. The sales contract didn't mention paying interest on escrow, but I'm wondering if my niece was cheated. PHYLLIS ABBATE Massapequa, N.Y.

A. She wasn't cheated, but she may be able to recover the interest. When a sales contract doesn't require that you receive payment of interest for the escrow deposit--and when the escrow is expected to earn less than $150--a lawyer is not required to set up an interest-bearing account.

Since the seller's lawyer didn't anticipate the delay in closing and assumed that your niece's $22,000 down payment wouldn't be held long enough to earn $150, he probably put it into New York State's IOLA (Interest on Lawyer Account), which is a short-term bank account for escrow funds. The earnings on these deposits are used to fund legal aid services.

Your niece may be able to recoup the interest from the IOLA. She should ask the seller's lawyer to approach the agency's administrator on her behalf. If he did not use an IOLA, simply making the inquiry might prompt an interest settlement directly from the lawyer.

Q. I adopted my foster child last May. Can I claim him as a dependent on my 1998 tax return, even though the state paid me a foster-care subsidy for him until May? WILLIAM B. Abilene, Texas

A. Since you provided more than half your son's support last year, you can claim him as a dependent even though you received a subsidy for the rest.

Q. As I understand it, a stock-index fund's gains include reinvested dividends while the indexes themselves only reflect the gains in share prices. If that's the case, why do these funds generally trail their indexes? KEN LAWRENCE State College, Pa.

A. In fact, both the indexes and the index funds include reinvested dividends, but the fund performance numbers also include administrative fees. That's one reason why performance figures differ. Weighting--the percentage of a portfolio represented by each stock--also affects performance. In the indexes, weightings are adjusted regularly to reflect the relative market capitalization of each company. Index funds do not always adjust their weightings in sync with the indexes. That factor can cause a fund to outperform or underperform an index.

Q. I'm considering buying a vacation house in Vancouver, B.C. Is home mortgage interest still tax deductible if the home is not in the U.S.? MARK LAU New York City

A. The IRS sees no boundaries on this issue. A foreign location makes no difference; nor does it matter if a foreign bank lends you the money. The IRS requires that you keep documentation of your interest payments from the lender, that there must be a public record of the loan and the loan must be secured by your house.

But consider this: New York is quite a hike from Vancouver. If you don't use the house for more than 14 days a year and wind up renting it out for a period longer than that, the IRS will deem your house rental property. You will then have to take your mortgage deduction as a business expense and report the rental income on your tax returns.

REPORTER ASSOCIATES: Jan Alexander, Adrienne Carter