Hello,
I have a very specific and semi unusual question.
I am buying a commercial rental house from the two relatives. They each will be providing me a private loan to finance my buying of the house in the amount of their respective share of the house. I will be buying the property through a recently established LLC.
The questions are:
I believe I can deduct the loan interest off of my operating expenses? Is this correct? Is there anything special that I need to setup in the contracts?
On the flip side, I believe the sellers will need to claim the interest paid to them through the loan as income?
Will we need to setup 1099s for this interest income, or is it sufficient to just report the amounts on our taxes with no official form, just our personal leger that we used to track the principle and interest paid through the year?
Thanks,
POW
