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Solved

What do I put the interest I received as the LENDER from a private mortgage loan?

Forum|Forum|2 years ago
February 28, 2024
1 reply
0 views

I have loaned a family member money to buy a home. I have researched and know that I have to file a 1099 Mortgage with the IRS using form 1096 (I have done so) and I have sent the family member a copy of the 1099. Now I am doing my tases using Turbo Tax and I can't find where I report the income from the interest they have paid me. I know that I have to report this interest income on my taxes. I am looking for advice on how to claim that using turbo tax. It really doesn't qualify as a seller-financed loan, as I did not sell them my home, I jsut help finance their home. Help if you can!

Best answer by KrisD15

Unless you have a lien on the property, the interest the family member pays to you is not deductible for them.

If your loan is tied to the property, they could claim the interest they pay you as Home Mortgage Interest.

I assume you meant that you sent them a 1098, not a 1099.

If the loan is not tied to the property, it might be considered a personal or "gift loan" in which case you would not need to claim the interest.

TurboTax Tip: According to the tax code, some loans are exempt from the imputed interest rules. These include loans "without significant tax effect" as described in Publication 550 and gift loans of less than $10,000, as long as the money isn't used to buy income-producing assets.

You do seem to be certain that you should claim the interest and you can do that under:

Wages & Income
Interest and Dividends
Interest on 1099-INT (even if you don't have a 1099-INT)
START
Answer Yes to move forward
Select "I'll type it in myself"
Enter the family member's name and the amount of interest

Unless you have a lien on the property, the interest the family member pays to you is not deductible for them.

If your loan is tied to the property, they could claim the interest they pay you as Home Mortgage Interest.

I assume you meant that you sent them a 1098, not a 1099.

If the loan is not tied to the property, it might be considered a personal or "gift loan" in which case you would not need to claim the interest.

TurboTax Tip: According to the tax code, some loans are exempt from the imputed interest rules. These include loans "without significant tax effect" as described in Publication 550 and gift loans of less than $10,000, as long as the money isn't used to buy income-producing assets.

You do seem to be certain that you should claim the interest and you can do that under:

Wages & Income
Interest and Dividends
Interest on 1099-INT (even if you don't have a 1099-INT)
START
Answer Yes to move forward
Select "I'll type it in myself"
Enter the family member's name and the amount of interest

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