Not it isn't. It is not a "Seller Financed Loan", it's a private loan.
Where do I claim interest received from a private mortgage loan *NOT by seller* backed by Deed of Trust?
For the borrower, it is quite straight forward, enter the amount paid on line 11 of Schedule A.
But for the lender it is extremely unclear.
IRS instructions, e.g. Publication 936, only covers *Seller Financed Loans*, not private loans.
In that case, it would go on schedule B - but that's NOT the case, this is NOT a Seller Financed loan, it's a private loan.
It would be easy if lender sent borrower a 1098, but they are not supposed to do that unless they are "in the business", which is NOT the case..
The only place left is 1040 line 21 "other income", but the description of items for those lines doesn't fit this situation.
I spent hours searching, with no answer. It seems this situation isn't that uncommon, there should be a clear guideline from IRS what to do, but I haven't found it.
