How to create 1098 mortgage interest statement form filed with Turbo Tax Return

[Irene2805]

To enter the information from your 1098, please follow these steps:

1. Click on Federal Taxes >  Deductions & Credits
2. In the Your Home section, click on the Start/Revisit box next to Mortgage Interest, Refinancing, and Insurance (Form 1098).  
3. Continue through the screens, entering the requested information.

[73Boomer]

My previous question probably was not clear. I am the lender not the borrower. I want to know how to create a 1098 for the Borrower and have it filed with my tax return where I claim the interest for income. Thanks

[AmyC]

The interest income goes on schedule B with the other interest.  Follow these steps:

1. Go to Income (different named area in different programs)
2. scroll down to Interest and Dividends
3. Locate Interest from Seller-Financed Loans
4. Click Start
5. screen says, Any seller financed loans?
6. Click Yes
7. Enter the information of the person from whom you received the interest and the interest received.
8. Continue

[scout12345]

I understand how I will be reporting the interest received from a financed mortgage, but also wondering if TurboTax generates the 1098 form that I can provide the buyer paying the mortgage? 

[DoninGA]

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@scout12345 wrote:

I understand how I will be reporting the interest received from a financed mortgage, but also wondering if TurboTax generates the 1098 form that I can provide the buyer paying the mortgage? 

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No.  TurboTax does not provide a Form 1098.

You would only need to file a Form 1098 if you were in the business of lending money.  If you do not have this type of business then there is no need to provide a Form 1098 to the buyer.

IRS Form 1098 - https://www.irs.gov/pub/irs-pdf/f1098.pdf

IRS Form 1098 instructions - https://www.irs.gov/pub/irs-pdf/i1098.pdf

[ezqferg]

I'm in the same boat. I am the lender on a private mortgage to my brother. The IRS instructions do not say where to send form to them. Does anyone know where to send Form 1098 mortgage interest  to the IRS? After sending a copy to the borrower, do we even need to send to the IRS? Thank you

[DoninGA]

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@ezqferg wrote:

I'm in the same boat. I am the lender on a private mortgage to my brother. The IRS instructions do not say where to send form to them. Does anyone know where to send Form 1098 mortgage interest  to the IRS? After sending a copy to the borrower, do we even need to send to the IRS? Thank you

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You would only need to file a Form 1098 if you were in the business of lending money.  If you do not have this type of business then there is no need to provide a Form 1098 to the IRS.

[MinhT1]

@ezqferg

If you are not in the business of providing mortgage financing (such as a bank), you are not required to issue form 1098 to your mortgagee. And you do not have to file that form with the IRS.

However, you have to provide your mortgage with your SSN (or EIN if you have one) and the interest amount so that he can claim mortgage interest.

[ezqferg]

Well I'm making thousands in interest each year because it is still a legitimate loan. Doesn't that make me a business if I am making money from this? Again, what is the physical address that businesses submit the 1098 to the IRS?

If there is no address, then I won't worry about it. I really appreciate your fast response. Thank you all.

[DoninGA]

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@ezqferg wrote:

Well I'm making thousands in interest each year because it is still a legitimate loan. Doesn't that make me a business if I am making money from this? Again, what is the physical address that businesses submit the 1098 to the IRS?

I really appreciate your fast response. Thank you all.

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As stated in the IRS Form 1098 Instructions on page 2 - https://www.irs.gov/pub/irs-pdf/i1098.pdf#page=2

Who Must File

You are not required to file this form if the interest is not received in the course of your trade or business. For example, you hold the mortgage on your former personal residence. The buyer makes mortgage payments to you. You are not required to file Form 1098.

[ezqferg]

Perfect. Thank you!

[lnk-fr]

Can you clarify what you mean by this?

"However, you have to provide your mortgage with your SSN (or EIN if you have one) and the interest amount so that he can claim mortgage interest."

Is there a form I fill out or a way to provide the SSN for the mortgage interest? 

[Carl]

As an individual owner/financier that is not "in the business" of lending money, you are already reporting the mortgage interest you receive on your tax return. So no other reporting to the IRS is required by you. However, you are required to provide 1098 information to the borrower. It is not required that you actually issue them a form 1098. You can send them a "letter in lieu" of the actual form, so long as that letter contains all the information exactly as it would appear on a 1098. For some sample letters, just google or quack "letter in Lieu".

I used to get such letters from my mortgage holder every year, until I refinanced with a different lender.

Also, check out https://www.irs.gov/pub/irs-pdf/i1099gi.pdf page 15 "Substitute Statements" for more details.