Form 6252, entering loan exps

[AZ-Tax]

Seller-finance TP receives 1099-Int from Title Co who services TP's loan to buyer. 1099-Int is broken down with an amount for Interest and amount for Principal plus amount the Title Co charges to service the loan. I could not locate a line on the 6252 to enter loan servicing exps. Is there a form I can enter this exp on?

[kathyc2]

I would say it qualifies as Sch A other misc deductions, subject to 2% floor.

[Burke]

I agree, assuming this is a sale of personal residence or property. If sale of a business asset, goes on Sche C/1065/1120, etc.

[AZ-Tax]

Its a seller finance rental property sale

I agree, assuming this is a sale of personal residence or property. If sale of a business asset, goes on Sche C/1065/1120, etc.

Its a rental property the seller (TP) financed. Form 6252 has no place to enter that data. Only principal and interest. When the TP owned the rental, he filed a Sch E.

[kathyc2]

How about line 11? I'd say that's close enough and quite possibly entirely accurate. Especially on Oct 13.

Line 11 of Sch A? It's not interest, it's a fee. If instead of paying the title company the fee, they paid tax preparer the fee would you take it off line 11?

[RitaB]

I wanted to bow out gracefully

Line 11 of Sch A? It's not interest, it's a fee. If instead of paying the title company the fee, they paid tax preparer the fee would you take it off line 11?

I meant Form 6252, but then deleted the answer, because I didn't understand why a fee would be on a 1099-Int form. Makes no sense at all to me, so let's both delete our comments. How bout that?

[AZ-Tax]

Believe it or not the fees do appear on a "1099-Int Mortgage Interest" form

I meant Form 6252, but then deleted the answer, because I didn't understand why a fee would be on a 1099-Int form. Makes no sense at all to me, so let's both delete our comments. How bout that?

Yes the fees are on the "1099-Int Mortgage Interest" That is what this form is named on the top of the form. Its a full letter size form very different layout then a form 1099-Int we are use to seeing. Form 6252 line Line 11, I believe deals with the commission and exps related to the sale only. The fees TP is paying has to do with servicing the loan and the fees are ongoing. As mentioned earlier, its a seller finance loan and TP is the seller.

[Burke]

Line 11 of 6252 is only used in the year of sale to account for expenses of sale at closing in order to figure the gain. If this is an ongoing loan servicing fee, he can take it on Sche A as a misc expense subject to 2%, IMO, unless he is a real estate professional filing a Sche C. It is attributable to the production of income. Interest goes on Sche B, principal goes on 6252 to figure taxable gain which flows to 4797.