My parents loaned us money to purchase a house. how do we report mortgage interest without a 1098?

[SweetieJean]

Is there a signed loan agreement secured by the home, and filed with the county?

[TomYoung · Accepted solution]

Your parents aren't obligated to provide a Form 1098 and although the interview and tax forms assume a Form 1098 is available, that's not always the case.  Presumably you can figure out the interest paid based on the amount of the loan terms and the stated rate.  The parents will report interest income "as if" they had received a Form 1099-INT and you'll report your interest deduction "as if" you'd received a Form 1098.  There's no problem with that.

Tom Young

[macuser_22]

That is true, but as SweetieJean said, to be deducible a home loan must be secured by the property that can be sold as if the loan defaults.  Many (many most) states require that secured home loans be registered with the county registrars office against the property title..   It requires a specific loan contract to qualify.

[TomYoung]

You're right, of course.  My implicit assumption was that the loan really was a legal mortgage/deed of trust and that the OP was concerned that they didn't have that little piece of government-approved piece of paper with "Form 1098" printed on it.  

[macuser_22]

I was pointing that out because many parent/child loans are done informally and probably do not meet the requirements of a "secured loan".    Since a secured loan clouds the  title of a property, a title search should show the amount of a secured loan and loan holder in most jurisdictions.

[jbeehlerwi]

Thanks for the information. Our loan is registered with the county registrars office against the property title so it looks like we are able to deduct the interest. Appreciate all of the information.