topic I held a mortgage on a property that the current owner refinanced in Sept. Where/how do I report the income from the payoff and the payments received till it re-fi'd? in Investors & landlords

I held a mortgage on a property that the current owner refinanced in Sept. Where/how do I report the income from the payoff and the payments received till it re-fi'd?

schubertturbotax — Thu, 01 Apr 2021 22:12:05 GMT

Re: I held a mortgage on a property that the current owner refinanced in Sept. Where/how do I rep...

AmyC — Fri, 02 Apr 2021 00:41:37 GMT

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

Re: I held a mortgage on a property that the current owner refinanced in Sept. Where/how do I rep...

schubertturbotax — Fri, 02 Apr 2021 16:14:36 GMT

Thank you. It was not my home but I home I previously owned as an investment. When I sold it in 2014, I held the mortage for the new owner. He refinanced in 2020 and got a new loan with a bank in Sept, so I received some mortgage payments and then the payoff. Thank you for your help!

Re: I held a mortgage on a property that the current owner refinanced in Sept. Where/how do I rep...

Carl — Fri, 02 Apr 2021 16:49:01 GMT

A pay off is a return of your money and is not taxed.

Be careful here. Understand that may not be true for a seller financed loan. For example, if the seller originally purchased the property for $150K and then sold it $300K as a seller financed loan, I seriously doubt the seller of a property gave the buyer $300K of their money they already paid taxes on, so the buyer could pay it back in installments.