Need to file a 1099-INT

Forum|Forum|1 year ago
January 30, 2025
1 reply
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Need to file a 1099-INT for interest paid on a car loan that I hold the title from a person that bought the car. I am acting as the bank. Interest paid is more that $600

ThomasM125

Level 15

You don't need to report the interest that you received on a loan you made on a Form 1099-INT. You do need to enter the interest income on your tax return as though you had received the 1099-INT form, but you don't need to actually prepare it and submit it to the IRS.

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JimDimitriAuthor

Level 2

Then why do the banks send out 1099-INT forms. I am acting in the same capacity as the bank and need to submit to the borrower the form for their taxes.

ThomasM125

Level 15

Interest income is reported on a Form 1099-INT. Since the loan is being paid to you, you will report the interest income so you would be the one who would receive the 1099-INT form. The payor of the interest is an individual and not a business entity, so he doesn't have to issue a Form 1099-INT to you. The payor would issue the form, you wouldn't issue one since you are the recipient.

The borrower doesn't need the interest statement for his tax return since it is not a mortgage so the interest is likely not deductible. Personal interest on a loan is not deductible like it once was, so the borrower doesn't need to report the interest expense, unless he is self-employed and uses the vehicle for business purposes. In that case, he would just ask you for a statement showing the interest expense.

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