If the seller is financing the sale of his house, what does he need to provide me at the end of the year to show what interest I have paid?
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If the seller is financing the sale of his house, what does he need to provide me at the end of the year to show what interest I have paid?
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He has to call the IRS and order a Form 1096 and Form 1098. He fills out the yearly interest you have paid. He gives you one copy and sends the front copy to the IRS. It only takes 2 minutes. You can even order the forms for him and help him fill them out to make sure you get credit for the interest if you Itemize..
If there is an existing mortgage on the property you may be out of luck on claiming those expenses and especially unless he claims them as INCOME on his tax returns.
Has the title/deed been swithched to your name, did you do a title search, if not you may been in for a shock. I so hope you had an atty that went over all this papwork you signed.
2 things:
Make sure your paying his bank directly on the note ( if any ) he owes and a check to him for the profit he is making ( if any )
Get a lawyer and get everything in writing and recorded at the registry of deeds.
Mofuggers be doing seller financing and then not paying what they owe to the bank. Then the house gets forclosed and your out the door and out all the money you paid to him..
The people above obviously have never dealt with Land Sales Contracts. You can deduct the entire amount of interest you pay on the LSC note. The guy you are buying it from can deduct the entire amount of interest he is paying the bank, if any.
You are talking about interest on two separate contracts. They have different rates, and different lives. For tax purposes, they are NOT tied together. Check with your tax preparer for confirmation.
To answer your question, the seller should provide you with a 1099 at the end of the year. 1099 are supposed to be sent prior to January 31. There are IRS penalties for the seller, if the seller doesn’t send the 1099 in a timely manner.
Hopefully, you set it up with an escrow company receiving the payments, paying the sellers mortgage if any, and sending the difference to the seller. If so, the escrow company will send you a 1099 at the end of the year and the seller won’t have to.