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I am doing my first WRAP mortgage interest income through my LLC. (The seller extends to the buyer a junior mortgage which wraps around and exists in addition to any superior mortgages already secured by the property)
My note servicing company issued 1099 INT which indicates interest income ($8K) which is higher than the actual interest income ($2K) received from the end buyer. It seems like note servicing company is most likely reporting underlying mortgage interest income ($6K).
How do I report actual interest income ($2K) under Interest income? In other words, where can I deduct underlying mortgage interest income ( as an expense)?
Thank you in advance for your help.
I understand that it is not necessary to give the payee a 1098, but is this a Capital Gain asset for me under Rev. Rule 64=162 since I am reporting the interest and principal pay back over 25 years?
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An installment sale is a sale of property where you receive at least one payment after the tax year of the sale. You can read more about installment sales here.
You can report part of your gain when you receive each payment, rather than all of your gain in the year of the sale.
Here’s how to report one in TurboTax:
Here's more info on Form 6562.
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