How do I enter interest income from a privately held mortgage (parent to child; recorded)?

[stevebyan]

Where should I enter interest income from a private mortgage loan? It's not a seller-financed mortgage, it's a private mortgage loan to my child, recorded on the purchased property. My child did not purchase the real estate from me. It's not a personal loan, it's a mortgage. I've sent my child a Form 1098 Mortgage Interest Statement for the payments I've received. Where do I record the number in line 1 of a Form 1098 that I _sent_ (not _received_)?

[MinhT1]

To enter your seller-financed mortgage, please follow these steps:

1. Open your return
2. Click on Search at the top right of your screen
3. In the Search box, enter seller financed mortgage and click on the magnifying glass icon
4. In the search result box, click on Jump to seller financed mortgage
5. TurboTax will take you directly to a section where you can enter your seller-financed mortgage interest.

[stevebyan]

As I explained in my post, it is _not_ a seller-financed mortgage. I provided the mortgage, but I did not own the property that secures the mortgage.

[PattiF]

You would enter the interest income as if you received a 1099-INT.

Enter the individual's name as the payers name, use the SSN as the EIN, and enter the amount of the interest in Box 1. 

Please see this TurboTax Help article about how to enter interest without Form 1099-INT.

@stevebyan 

[stevebyan]

TurboTax on my Mac doesn't have a place in EasyStep for me to enter an EIN for the "type it in myself" 1099-INT, nor a place to enter the address of the property. I need to have that information included so that the IRS can match it with the 1098 my child is filing.

I switched to Forms and there is a place at the bottom of the Form 1099-INT to enter the Payer's TIN and address. However, it won't accept a Social Security number in this field. It says the "Payer's Federal ID Number is invalid. You must enter a valid employer identification number."

So apparently I can't do this with TurboTax?

[KrisD15 · Accepted solution]

If you issued a 1098 to your child, and sent the IRS their copy, the IRS has all that information (Payer's SSN, Payer's Address) 

As long as you report the interest on your return, you're good. 

You don't need an EIN or 1099-INT to report the interest income. All you need is to enter the name of the payer (your child) and the amount of interest. 

The IRS does not need you to list the information from your child's 1098 on your return so that the IRS will match you, they will look for that matched interest reporting on both of your returns because of the 1098 you issued. 

[bflosoldier19]

Where in turbo tax do you enter that interest income- there used to be a question you could answer   But it does not seem to be there this year 2023   Instead TurboTax acts as if I have farm income which I’ve never had   Did tt screw this up?

[Critter-3]

To enter seller financed interest income:

• Type interest income - seller financed and click search/find.
• Click on Jump to interest income - seller financed. 
• Continue with the onscreen questions. 

[MarilynG1]

In the Wages & Income section, scroll down the topics to 'Interest and Dividends' and you'll see the 'Interest from Seller Financed Loans' item.

[Quercus]

@KrisD15My situation is pretty much the same as @stevebyan . I have Turbotax home and business 2023 and was wondering how to get Turbotax to generate the 1098 form with the step-by-step process, fill out Form 1098 within Turbotax, or should I fill out the 1098 form from the IRS website, give it to the loan payer, and declare the interest on the 1099-INT section. If the later, do I need to provide a copy of the 1098 Recipient/Lender to the IRS?  Thanks.

[PatriciaV]

TurboTax does not provide a service to create Form 1098. See this IRS link for information, instructions, and the form you need: About Form 1098

@Quercus

[bflosoldier19]

that screenshot is not what mine looks like - maybe what it looked like in prior years. I have the Premium not Premier. It has no line for private mortgages.  I decided to just report it as intertest income and put the private mortgagee on the line for financial institution, etc.

[LindaS5247]

You can enter mortgage interest received from a private mortgage in TurboTax (the same as you would a Form 1099-INT) as follows:

In TurboTax, you can enter your form 1099-INT by following these steps:

• In TurboTax, open your tax return
• Click on Federal in the left-hand column, then on Wages & Income on top of the screen
• Scroll down to All Income, locate the section Interest and Dividends and click on Show more
• Click Start next to Interest on 1099-INT.