If I loan $30,000 at 6% to my sister to buy a home, how/where do I report the interest she pays to me on my 1040 form?

[VolvoGirl · Accepted solution]

Enter like if you got a 1099Int from them.

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 Jump to Full List -or I'll choose what I work on
Interest and Dividends
Interest on 1099INT - Click the Start or Update button

[Critter]

Per  IRS Publication 550 Investment Income  Interest on seller-financed mortgage.   If an individual buys his or her home from you in a sale that you finance, you must report the amount of interest received on Schedule B (Form 1040A or 1040), line 1. Include on line 1 the buyer's name, address, and SSN. If you do not, you may have to pay a $50 penalty. The buyer may have to pay a $50 penalty if he or she does not give you this information.

You must also give your name, address, and SSN (or employer identification number) to the buyer. If you do not, you may have to pay a $50 penalty.

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.

[sfsnowboarder]

Curious on how your sister report the interest expense?  Did she report it as mortgage interest or did she reported it as other interest expense?