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edavance
New Member

I got a 1099-Misc from my mortgage loan bank that list as other income the credit they gave me for closing costs. I was the buyer. Is this taxable?

The mortgage loan credit was used for closing costs.
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Leonard
Intuit Alumni

I got a 1099-Misc from my mortgage loan bank that list as other income the credit they gave me for closing costs. I was the buyer. Is this taxable?

No, it is not taxable.

The credit you received from the bank was a return of excess payments that you made at closing.

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9 Replies
Leonard
Intuit Alumni

I got a 1099-Misc from my mortgage loan bank that list as other income the credit they gave me for closing costs. I was the buyer. Is this taxable?

No, it is not taxable.

The credit you received from the bank was a return of excess payments that you made at closing.

View solution in original post

edavance
New Member

I got a 1099-Misc from my mortgage loan bank that list as other income the credit they gave me for closing costs. I was the buyer. Is this taxable?

Thank you.
Leonard
Intuit Alumni

I got a 1099-Misc from my mortgage loan bank that list as other income the credit they gave me for closing costs. I was the buyer. Is this taxable?

You are welcome
alfonza-brown
New Member

I got a 1099-Misc from my mortgage loan bank that list as other income the credit they gave me for closing costs. I was the buyer. Is this taxable?

Hi Leonard, I would like further clarification. So, we do not have to report credits that they gave us, even though they applied the credit during the closing?
kujo2653
New Member

I got a 1099-Misc from my mortgage loan bank that list as other income the credit they gave me for closing costs. I was the buyer. Is this taxable?

I also recieved one for the same reason. However, the 1099-Misc is submitted to the IRS. How do you correct this to avoid paying taxes for this sum? It should show that I'm missing a 1099-MISC reporting if I tried to just file without it.

yellow dog
Returning Member

I got a 1099-Misc from my mortgage loan bank that list as other income the credit they gave me for closing costs. I was the buyer. Is this taxable?

I also received a 1099-Misc from mortgage lender that lists other income.  Is there a solution to this issue?

DaveF1006
Expert Alumni

I got a 1099-Misc from my mortgage loan bank that list as other income the credit they gave me for closing costs. I was the buyer. Is this taxable?

It depends. Normally closing costs are added to the basis of your house to determine capital gains when you sell the house. Capital gains are the difference between your basis and your proceeds received upon the sale of your house. If you received a check for the closing costs, this is an economic benefit to you and is taxable income. in return, your closing costs, with the exception of mortgage interest and property taxes can be added to the basis of your house to lessen your capital gains when you decide to sell your house. Your mortgage interest and property taxes can be deducted this year providing you can itemize your deductions this year.

 

 

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yellow dog
Returning Member

I got a 1099-Misc from my mortgage loan bank that list as other income the credit they gave me for closing costs. I was the buyer. Is this taxable?

Hi Dave,

 

I was the buyer of the house.  I paid closing costs in addition to the purchase price of the home.  

The 1099-MISC specifies other income of $752.  How could I accumulate income by purchasing a home and paying closing costs?

ReneeM7122
Level 8

I got a 1099-Misc from my mortgage loan bank that list as other income the credit they gave me for closing costs. I was the buyer. Is this taxable?

You didn't accumulate income by purchasing a home and paying closing costs, but if the bank gave you a credit somehow then they are saying that it was a benefit to you that is taxable (which you can add to the basis of your home later).  We would respectfully suggest calling the lender to ask them why the interpreted it as such.

@yellow dog

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