Builder wanted me to do a construction to perm loan and I said no. This is a spec home he has built many times in a subdivision, so not a custom home. He wants me to reimburse him for the interest he will pay on the construction loan. He wrote it as a change order (Financing) - Payable prior to possession - financing costs payable to builder. My question is, do I need him to supply me with a 1098 to make this tax deductible to me on my taxes next year when I pay him and take possession of the home? He is financing with a local bank and he will get a 1098. I am not sure if the amount he is asking me to pay will even match the 1098, but that will be in his name anyways. Hoping someone can help answer how I need to handle this. If I pay for the financing cost, he shouldn’t get to deduct it.
