If the loan meets the requirements of a secured
debt (explained below) - please report the interest as a
regular mortgage interest paid:
- Federal Taxes
- Deductions and Credits
-
Your Home,
- Select Mortgage Interest and Refinancing - enter the name of your lender and indicate (on the next screen) I did not receive a 1098, then enter the amount.
If the loan doesn't meet the requirements - it is considered a personal loan and is not tax deducible.
Home mortgage interest is deductible only if the mortgage
is secured debt. Secured debt is represented by a signed instrument (such
as a mortgage, a deed of trust or land contract) that:
- Makes
the borrower’s ownership in a qualified home security for payment of the
debt,
- Provides,
in case of default, that the home could satisfy the debt, and
- Is
recorded or is otherwise perfected under any applicable state or local
law.
Please refer to the IRS Publication 936 for more details.
