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#5188 - 10/02/01 07:11 PM 1098 on Lot Loans
MAK Offline
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Joined: Sep 2001
Posts: 3
Central Maryland
Can anyone tell me if we are "required" to send 1098's on lot loans (real estate, no dwelling or improved property)? The info I've found on IRS website says the interest in not necessarily deductible, but I can't find anything that says we should be sending 1098's.
Opinions and views expressed are my own and not necessarily those of my employer (unless correct)

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#5189 - 10/02/01 07:27 PM Re: 1098 on Lot Loans
Elwood P. Dowd Offline
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Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
If the borrower is an individual and any portion of the collateral is real estate (read: dirt), the interest is reportable.

As you note, generally the interest on a lot loan would not be deductible, but the rules on reportability and deductibility do not mesh. For example, interest paid on a motor home may be deductible as a residence or vacation home, but it is not reportable.

For assurance, take a look at the 1098 instructions on the IRS Web Site:

In this world you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant.

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