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How to enter mortgage interest received from personal loan? Should I send borrower form 1098?
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How to enter mortgage interest received from personal loan? Should I send borrower form 1098?
No, you do not send a 1098. You can use an amortization schedule which you both should have or just communicate the amount between yourselves so that both of you report the same amount.
If you received
interest from someone either as mortgage interest or other interest, enter it
like you had received a 1099-INT and put the amount in Box 1. Enter
it under….
Federal Taxes Tab
Wages & Income
Choose Explore on my own or I'll choose what
to work on (if it comes up)
Interest and Dividends
Interest on 1099INT - Click the Start or
Update button
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How to enter mortgage interest received from personal loan? Should I send borrower form 1098?
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How to enter mortgage interest received from personal loan? Should I send borrower form 1098?
No, you do not send a 1098. You can use an amortization schedule which you both should have or just communicate the amount between yourselves so that both of you report the same amount.
If you received
interest from someone either as mortgage interest or other interest, enter it
like you had received a 1099-INT and put the amount in Box 1. Enter
it under….
Federal Taxes Tab
Wages & Income
Choose Explore on my own or I'll choose what
to work on (if it comes up)
Interest and Dividends
Interest on 1099INT - Click the Start or
Update button
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How to enter mortgage interest received from personal loan? Should I send borrower form 1098?
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How to enter mortgage interest received from personal loan? Should I send borrower form 1098?
jpinter has a point .... so let me add to my answer.
If you are not in the business of loaning money like a bank then you do not need to send the payer a 1098 per the IRS regs on that subject. Instead the payer will report the mortgage interest paid by entering the name, address & tax number of who they pay on the Sch A and the holder of the mortgage will report the name , address & tax number of the payer on the Sch B so they cross reference each other.
See the screen shots ...
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How to enter mortgage interest received from personal loan? Should I send borrower form 1098?
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How to enter mortgage interest received from personal loan? Should I send borrower form 1098?
Where do I claim interest received from a private mortgage loan *NOT by seller* backed by Deed of Trust?
For the borrower, it is quite straight forward, enter the amount paid on line 11 of Schedule A.
But for the lender it is extremely unclear.
IRS instructions, e.g. Publication 936, only covers *Seller Financed Loans*, not private loans.
In that case, it would go on schedule B - but that's NOT the case, this is NOT a Seller Financed loan, it's a private loan.
It would be easy if lender sent borrower a 1098, but they are not supposed to do that unless they are "in the business", which is NOT the case..
The only place left is 1040 line 21 "other income", but the description of items for those lines doesn't fit this situation.
I spent hours searching, with no answer. It seems this situation isn't that uncommon, there should be a clear guideline from IRS what to do, but I haven't found it.
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