IRS Reporting for Private Money Interest Earned

[Chris Licavoli]

I am happy to announce that I have just completed my first flip project using private money.  The project was successful and the investor received a check at closing for his principal plus interest.  He was extremely happy to say the least, but I believe I have created an obligation for myself to report his interest earned to the IRS.  I have no idea how to do that or if I do have to do that.  Are there any experienced PM users out there that can offer some advice.  Is this something my CPA will do for me or should I do it?  How do you do it? 

Thanks in advance!

[Matt Taylor]

Originally posted by @Chris Licavoli:

Yes it was a mortgage paid with interest.  I thought I was supposed to fill out the form and 1099 him to the IRS for the interest I paid him?

I know it's confusing, but hey, it's the IRS!  If it were non-mortgage interest that you paid him YOU would have to give HIM a 1099-int.  But since it is MORTGAGE interest that you paid him, HE has to give YOU a 1098.  I have to do this every year - give all my borrowers 1098s.  The 1098 is entitled "Mortgage Interest Statement".