The interest earned is reported on Sch B. A pay off is a return of your money and is not taxed.
Was this a seller financed sale? Was it your house?
If you simply held the mortgage, follow these steps:
Go to Federal
- Income
- Scroll down to Interest and Dividends
- Select Interest on 1099-int (if seller financed, pick that option instead)
- Add
- I'll type it in myself
- Continue
- Received from: Enter SSN or Last Name
- Box 1 Enter interest earned
- continue
- If you have their social, that can be entered as the EIN, otherwise, No, they didn't
- continue
- continue
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
