We did an owner finance on a home with an outstanding mortgage.
We hired a loan servicing company to handle all the payments from the buyers and the payments to the mortgage company.
The loan servicing company sent us a 1099-INT with the full amount of interest the buyers paid, which was $12,756.57. We only received a total of $2,320.92 in interest income for the year, while the mortgage company received the remaining $10,435.65; how do I report this correctly to show we did not receive $12,756.57 in interest income for the year on this property?
Note: The loan servicing company also sends the buyers a 1098, showing the entire $12,756.57 in interest paid, which I do understand that did in fact pay that in interest.
