Seller Financing

[DHooks]

I am providing seller financing for a buyer.  At closing I was not given their SSN.  I have full name and address, but not the SSN.  The buyer will not provide me with it and I do not blame them.  Can I still file electronically without their SSN?

[PaulaM]

@DHooks

You should really try to obtain all the information from the buyer. With seller-financed mortgages, you are required to report the buyer's name, address, and Social Security Number to the IRS if the buyer is an individual.

You must also provide the buyer with your Social Security Number (SSN). (In private party sales, the buyer needs to enter your name, address, and SSN to deduct the interest expense on Schedule A as an itemized deduction.)

Failure to do either may result in a $50 penalty.

You will need to print and mail in your return with the information you have and the IRS will contact the buyer. 

[DHooks]

Thank you Paula!  I have tried to get buyer to give me full SSN, but they refused.  I have last four digits only.  I did provide them with a 1098 with my EIN. So now, my only question is whether I can electronically file (preferred) or if I really have to print and mail.  I went online to IRS.gov and can see that truncation is okay, but it is not completely clear on whether I can file electronically or not.

[PaulaM]

No, you need to paper file and include a statement that the buyer refused to provide their social security number. It is required information on both ends and you do not want to be assessed a penalty for failing to provide the information on your end. List their name and their address and the IRS will take it from there.