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What form is for Mortgage Interest? - What form is for Mortgage Interest?

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📊 Step-by-Step Guide

Step 1: If for Mortgage Interest Payments Received as Income from Seller Financed Mortgages

Use this when you are receiving interest payments from a seller-financed mortgage.

Interest income from seller-financed mortgages for when the buyer used the property as a personal residence can be reported on Schedule B, Part 1.

For more info on this: Seller-financed mortgages.

If you sold your home or other property and the buyer used the property as a personal residence, list first any interest the buyer paid you on a mortgage or other form of seller financing.

Be sure to include:

• the buyer's name
• the buyer's address
• the buyer's SSN

You must also let the buyer know your SSN.

If you don't show the buyers name, address, and SSN, or let the buyer know your SSN, you may have to pay a $50 penalty.

See IRS Instructions for more information: https://www.irs.gov/instructions/i1040sb

 

Step 2: If for Deducting Mortgage Interest Payments (Form 1098)

Use this when you are making mortgage interest payments and want to deduct them.

If the taxpayer had made mortgage interest payments they may have been issued a 1098 Form for: Mortgage Interest Statement.

Mortgage interest payments from a 1098 or not from 1098 can be reported on Schedule A as an itemized deduction from line 8.

If you are electing to itemize there are a few rules to note about deducting mortgage interest:

• You must be the primary borrower and be making payments on the loan.
• Youre limited to deducting interest on total mortgage debt of $750,000 or less, if the debt originated on or after Dec. 16, 2017. (The limit for older mortgage debt is $1 million.)

For more information consult IRS Pub 936: https://www.irs.gov/pub/irs-dft/p936--dft.pdf

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