Updated almost 9 years ago on . Most recent reply
Valuation, 1099/1098 Reporting, Retirement vs Non-Retirement Acct
Good Afternoon to all! Working through some questions as I finish my first individual Note purchases with my Individual 401(k) and was hoping the community would give me a hand in clarifying my thoughts some. Wanted to get a handle on a few of the differences between retirement accounts and non-retirements accounts when it comes to investing in a single Note. Specifically in regards to year end valuation and Form 1099 INT and Form 1098 Mortgage Interest Statement.
Retirement Account:
1. Year End Valuation: Need to have a year-end valuation for reporting on 5500EZ each year.
2. 1099 INT: Although a servicing agency may send you a 1099 INT, you wouldn't need this in this scenario as you are not paying tax on the interest gained at this time in your retirement account.
3. 1098 INT: Is necessary to distribute to the the borrower when interest paid is >= $600.
Non-Retirement Account:
1. Year End Valuation: Don't really need a year-end valuation for any kind of official reporting.
2. 1099 INT: Do need to determine your interest income via a 1099 INT to report on your taxes.
3. 1098 INT: Is necessary to distribute to the the borrower when interest paid is >= $600.
Am I on base or off base with my understanding here on these few concepts? Appreciate your help! Sincerely, Kevin