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Reporting/claiming home interest in a private mortgage

 
 
NadCixelsyd
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      12-09-2009, 02:21 PM
I represent a group that just wrote a mortgage for an individual. How
does the holder of a home mortgage (us) report interest paid (by the
homeowner) so that they can deduct it?

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HLunsford
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      12-09-2009, 02:31 PM
NadCixelsyd wrote:
> I represent a group that just wrote a mortgage for an individual. How
> does the holder of a home mortgage (us) report interest paid (by the
> homeowner) so that they can deduct it?
>


He may, but is not required to, send the amount of interest he is
reporting for tax purposes in a letter so that payor can match with his
own records and insure they both report the same figure.

IOW, a 1098 is not required in situations not a trade or business.

ChEAr$,
Harlan Lunsford, EA n LA

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rick++
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      12-09-2009, 07:22 PM
On Dec 9, 7:21 am, NadCixelsyd <(E-Mail Removed)> wrote:
> I represent a group that just wrote a mortgage for an individual. How
> does the holder of a home mortgage (us) report interest paid (by the
> homeowner) so that they can deduct it?


You dont. There is a line on 1040A for non-1098 interest for
mortgagee.
They will have document contracts and payments to the IRS in an audit.
This line is intended for multiple people on a mortgage contract,
because
only one SS# is reported to the IRS on a 1098.
Its also intended for private mortgages such as in your case.

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<< that may be imposed upon the taxpayer. >>
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removeps-groups@yahoo.com
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      12-10-2009, 07:34 PM
On Dec 9, 6:21*am, NadCixelsyd <(E-Mail Removed)> wrote:

> I represent a group that just wrote a mortgage for an individual. *How
> does the holder of a home mortgage (us) report interest paid (by the
> homeowner) so that they can deduct it?


My recommendation is for the mortgage lender to download form 1098
from the IRS website http://www.irs.gov/pub/irs-pdf/f1098.pdf. Fill
out Form B. Make a copy of it. Keep one copy for yourself, and send
one copy to the person making the mortgage payments. Don't send
anything to the IRS as there will be penalties for not following the
font rules, etc. You can also just write a letter that has the same
information.

However, what kind of "group" is this? If the group is in the
business of making loans, then you have to fill in part A of form 1098
and mail it to the IRS. You should use an online service to fill in
part A, just because the font and other requirements. If the group is
parents making a loan to their child, the approach in the above
paragraph is fine.

But the real question is do you know how much to write in box 1
(mortgage interest)? If the loan is fixed, then computer the
amortization schedule. The payments are fixed, but the amount that is
interest decreases each year over the life of the loan. If the loan
is interest only, then the computation is even easier. If the
interest varies each month, then the computation becomes harder
again. And if the mortgage payer makes extra principal payments, the
computation becomes difficult again.

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<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
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