Arthur Kamlet wrote:

- quote -

Huh? Whose brother? I don't even know if he has a brother.
- quote -

That, I take it, is a rhetorical question. (grin

ChEAr$,
Harlan

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On Jan 16, 6:40*pm, whatsupdoc...[at]hotmail.com wrote:
- quote -

the technicalities as well as the realities.

In general, reporting to the IRS on 1099s and 1098s and such is ONLY
REQUIRED when you are in a TRADE OR BUSIENSS. Clearly your mother is
NOT in the business of mortgage lending, so she has NO REQUIREMENT to
file a 1098. The IRS doesn't really want a 1098 from your mother, but
generally speaking they will accept it.

What hasn't been addressed is this:

Mom has to report the interest as income from a seller financed
mortgage; AND
the buyer gets to deduct it as mortgage interest on his return AND he
discloses whom he paid it to - and he should be including mom's SSN.

Here's where it gets interesting - the IRS will MOST certainly cross
check to see that what was claimed as a deduction by the buyer was
reported as income by mom.

Most buyers (read that PAYORS of mortgage interest) neither track nor
know how much of their payment is interest. Besides, you should make
sure that the buyer and seller report the same numbers so as to avoid
any love letters from the IRS.

SO - as a courtesy to the buyer, mom should prepare an INFORMATIONAL
mortgage statement for the buyer if for no other reason than to make
sure they both use the same numbers. It is also likely that IF she
doesn't give the buyer such a statement they will be calling her to
get one.

NOW - mom likely can't do the math herself and you don't seem to have
all the info. BUT the CPA does. The CPA also has to weigh the time
and cost associated with writing an informational letter to the buyer
versus just preparing a 1098. Being in public accounting for over 25
years I can tell you that filling in the 1098 is faster (read that
generally cheaper to the client) than writing a letter that contains
the same information. It also avoids questions raised by the buyer.
And keep in mind that there is NOTHING that says that AFTER the 1098
is prepared that the IRS copy actually has to be mailed.

My advice to you - which worth exactly what you're paying for it -
would be to let the CPA continue to prep the 1098, mail a copy to the
buyer, keep mom's copy in her records but DO NOT mail the IRS their
copy.

Good luck,
Gene E. Utterback, EA, RFC, ABA

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In article <9uyjj.57803$N67.54146[at]bignews5.bellsouth.net> ,
Harlan Lunsford <hnslunsford[at]bellsouth.net> wrote:
- quote -


Of course, if he and his brother have a joint savings account
and he got the 1099INT for $50, IRS says clearly he is to prepare
and send his brother a 1099INT for $25.


Does IRS really know what they want?



- quote -



ArtKamlet at a o l dot c o m Columbus OH K2PZH

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whatsupdoc205[at]hotmail.com wrote:
- quote -

should not type out two form 1098's for interest on a mortgage
he carries for property sold years ago, since he is not in the
bidness of lending money. IRS doesn't want such clogging up
their systems, and maybe some day he'll get the message.

When you have a choice, like this case, get rid of the paperwork!

ChEAr$,
Harlan Lunsford, EA n LA

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For the past 6 years, a CPA has dutifully filed a 1098 for
mortgage interest that my mother receives for a loan secured
by real property. I have no intention of changing that for this
year (i.e. for tax year 2007), if only because I am not sure
what adverse effect it might have on the borrower if we were
to summarily stop filing the 1098.

However, as I read the 1098 instructions, it is unclear to me
whether my mother "must" file a 1098. And if it is not a
"must", it is unclear to me whether she "may" file a 1098,
nonetheless.

I am just wondering if I am correct in thinking that the water
is muddy enough to warrant asking her new CPA about it.
(To be frank, we have not worked enough with him long
enough to know if his answers are reliable.) Or is it "obvious"
to those in the know that anyone "may" file a 1098, even if
they are not required to?

To be honest, I do not know the history and facts about this
loan well enough to present them here. In fact, that is part
of the problem with my trying to discuss the details with my
mother's new CPA: first, I would need to ferret out the details
from the cobwebs of my mother's mind; and that is the least
reliable task of all <g> . Besides, I am not looking for free
advice from this forum.

But I am hoping that someone in the know can tell me
dispositively if anyone "may" file a 1098, even if it is not a
"must" for them.

If that is the case, I might choose to keep quiet and "don't
fix what ain't broke".

TIA.

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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 > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >