Boat as 2nd home

[Possi]

Hello and it's good to be back in BUSINESS!
My client bought a new boat, fully equipped with kitchen, bed and bath.
How do I list the interest paid if not on a 1098? It is paid to a bank, so do I fill in the bank ID Number, name and addy?
I know it's a dumb question, but I'm trying to start the season slowly...


thanks,
~possi

[veritas]

Hello and it's good to be back in BUSINESS!
My client bought a new boat, fully equipped with kitchen, bed and bath.
How do I list the interest paid if not on a 1098? It is paid to a bank, so do I fill in the bank ID Number, name and addy?
I know it's a dumb question, but I'm trying to start the season slowly...


thanks,
~possi

That's how you do it. Don't forget to make an adjustment for AMT.

[Possi]

thanks!

as usual...thanks!

[Brad Imsdahl]

TTB, page 4-11 says, "If the taxpayer purchased the home from the recipient of the mortgage interest, and the recipient did not issue a Form 1098 to the taxpayer, the recipient's name, identifying number and address must be entered on the dotted lines next to line 11." [of Schedule A]

That is the only reason you would enter name, address, and ID number for mortgage interest not reported on a 1098.

In your case, the mortgage interest was paid to a bank that did not issue a 1098. I assume you did not purchase the boat from the bank. Therefore, the interest is still reported on line 11, but there is no need to fill in the bank name, address, and ID number. Although I suppose it wouldn't hurt to do it anyway.

[Snaggletooth]

Agree, but...

Agree with Brad, but...

...every year there are a handful of people that do not have 1098s, yet have mortgages with a financial institution. And I deduct the interest if I'm reasonably it is viable. I can estimate with reasonably good precision if I know the parameters of the loan. I realize the proper thing to do is for the client to contact the institution, but the likelihood of getting results before April 15th is minimal.

For most of these people, I suspect that the bank really did send the 1098, but the client has lost it, thrown it away with junk mail, moved without notifying of a forwarding address, etc.

That having been said, I caveat the situation with the taxpayer. And if there is not near certainty, I won't take it. For example, I won't take a second mortgage, a new loan, or a loan with no prior history. If the customer is not creditworthy, I won't take it because there is no guarantee interest has been paid, etc.

[OldJack]

And the question always comes up.... what is required of a debt for the interest to be considered "mortgage interest"?

[BP.]

I caveat the situation

A nerb is birthed!

[LTS]

fm 1098

one local bank does not send out 1098 if interest is less than 600. they have done this for a long time and it is a bad idea. when i can find out about it, i put it on line 11 with info. i suspect many lose out on the interest deduction that could get added on to other mort int amounts.