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?
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
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?
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.