USA 1098 statement w/deferred payments, interest still accruing HELP.

May 12, 2016
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United States

I have a private loan. I am trying to complete a 1098 for the lender. I had two month's payments skipped/deferred. Interest is still accruing
Question 1). How do I calculate or update the amortization excel sched to show this accurately? My solution was to simply erase the principal payment from the deferred months but continue to add the interest for those months. This increased the loan balance for those months by the compound interest amount only. Looks right...

Question 2) For completing the 1098 field #1 on this IRS form "mortgage interest received from borrower". Sound simple enough...I simply tally the year's interest PAID to the borrow. This would NOT include the interest EARNED in those month's the payment was deferred?

Question ¾) The Lender will NOT be able to deduct the interest NOT paid by me. to be stupidly redundant....EARNED is not the same as PAID?
So while they were gracious to let me skip the payments they will earn the interest but can't use those skipped months interest as deductions?

Questions 5) Is it typical in real estate lending to have deferred loan payment wholly deferred (P + i) or more typical for just principal to be skipped as I am describing in my situation.

Thank you for your help!


Jul 29, 2011
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United States
I assume you're doing this as a favor to the lender, given that it's a private loan. It's the lender's responsibility to prepare and send this form to you.

1) You're correct. Although technically, 'loan balance' refers to principal only which should not have changed. The total payments due, however, would go up.

2) Correct again. They will report the interest you actually paid them as income (not deductions), not the interest that accrued.

3/4) Yes and Yes. Again, income not deductions.

5) Over the past two years, this has become quite common. Many student loan programs automatically deferred principal and interest payments for the duration of COVID and will be facing the same situation.

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