Seller Financed loan interest

[lisazpiecez]

Hi there!

I sold my mobile home via seller financing/installment payments in 2023.  The buyer, who is a friend, says I don't have to pay taxes on interest received if I provide a 1099 to her.  I don't think this is correct? Thoughts?

[DoninGA]

No, that is not correct.  You have to report the interest received on a seller-financed loan as income on your tax return.

Click on Federal on the left side of the online program screen

Click on Wages & income

Scroll down to Less Common Investments and Savings

On Interest from Seller-Financed Loans, click on the start button

[lisazpiecez]

Ok, that sounds right.  When I plugged it into Turbo Tax, since I used a small portion of the mobile for my home office, it placed the interest income into my business.  Does that change anything?

[jpd1951]

Is it the buyer or seller social security number

[Critter-3]

The person receiving the interest will report it on a Sch B and enter the payer's name, address and SS# or EIN.

The person paying the mortgage interest will report is on a Sch A and will enter the payee's name, address and SS# or EIN.

You cross reference each other and no one issues a 1099 to anyone.