Tax Reduction and Owner Financing

[Phat Vi]

Hi All,

I am learning about owner financing and one of the question I have right now is "how does the tax reduction works in the owner financing". 

A normal mortgage company mails a IRS Form 1098 on the interest we pay. How can we get this if we construct an owner financing deal?

Any info will help.

Thanks,

Phat

[Brandon Hall]

Originally posted by @Phat Vi:

Hi All,

I am learning about owner financing and one of the question I have right now is "how does the tax reduction works in the owner financing". 

A normal mortgage company mails a IRS Form 1098 on the interest we pay. How can we get this if we construct an owner financing deal?

Any info will help.

Thanks,

Phat

 If the loan is secured by the underlying asset (real estate) then the note holder (lender) will issue a 1098 to the asset owner (buyer) with the amount that the asset owner paid in interest to the note holder during the year.

If the note is not secured by real estate, the asset owner will issue the note holder a 1099 detailing the interest paid to the note holder during the year.