Interest from a private loan

[CarolToppCPA]

Client loaned $7K to a friend in 2004 to buy and rehab a home. The friend returned the $7K with $1400 in interest 2 years later (in 2006). No 1099INT form. No records at all. How do I report this $1400 interest income? My software (TaxAct) doesn't let me enter interest income without a 1099INT including names, EIN/SSN etc...

The client plans on doing more of these private loans as part of a real estate investors group. Sounds risky to me, but it's what he wants to do...

Thanks,
Carol

[jainen]

tech support

>>My software (TaxAct) doesn't let me enter interest income without a 1099INT including names, EIN/SSN etc...<<

Call your tech support. If they don't know, call your sales rep. TaxAct is a major professional program. There is surely a way to report something as common as interest not shown on a 1099. Why, half my clients have that kind of income (because they earned less than $10.)

[OldJack]

Oh please!!

Software can't dictate your preparation of a tax return. Just fill in the 1099INT form in the software and go ahead with tax preparation. If you can't do that then override the space on the form. You don't give the 1099INT form to the IRS or attach it to the tax return anyway. The fact that the taxpayer did not get a 1099INT form is irrelevant to the taxable amount received.