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Reporting Mortgage interest to IRS
Old 12-20-2011, 08:11 PM   #1
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Reporting Mortgage interest to IRS

Something just crossed my mind today while posting interest income due to a mortgage we hold on a property. It's coming up on one year that we have been receiving the mortgage payments. I have done the amortization schedule calculator and have printed out the principal and interest payments and totaled them for the year. I will be claiming the interest as income and our buyer will be claiming the interest paid on his IRS return.

I was wondering if I am required to provide to the buyer any kind of official document such as a 1099 and also does this have to be submitted to the IRS? Anyone have an answer to this question? Thanks in advance.

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Old 12-20-2011, 08:16 PM   #2
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I send a letter with total amount of principal and interest paid. I think there is a line on Schedule A that says something like "interest paid not reported on a 1098."

Looks like it is Schedule A, Line 11.

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Old 12-21-2011, 01:46 PM   #3
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I handled the paperwork for a property my parents sold on land contract and for the 15 years of the contract, every year I would update the amortization schedule and send a letter to the buyers with the amount of principle and interest paid. Don't forget that you also have to report the interest received on your taxes...and need to provide the payer's SS number along with their name.
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Old 12-21-2011, 05:55 PM   #4
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Thanks for the replys. Guess I was feeling lazy at the time and should have Googled for this info. I just did tonight and found out something interesting. In my case on reporting the interest to the IRS, I don't have to file a form 1098. That is only required if the mortgage is secured by real property, meaning land attached. The house we sold was a manufactured home on leased land, so it is not considered "property". Just as in real estate taxes, you don't get a tax bill on that type house because you don't own the land. The same would hold true for a live-on boat. Just as I still have to report the interest as income, my buyers get to claim the interest paid as a deduction.
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