1. 1098 instructions say you "need not" file a 1098 on businesses, corps, etc. Is there anything wrong with doing this if the bank chooses to?

2. Real Property - this term isn't defined very clearly. Is it only referring to residential improved? Or does it inlcude residential lot loans? How about commercial or investment property?

thanks for any help you can give me.

#1. In my experience, there is nothing wrong with giving 1098s to businesses. FDIC Examiners had no problem with us giving 1098s on every loan. Customers must consult their tax advisor anyway to determine deductibility. Two things to consider are 1) it reduces questions/calls on how much interest did we pay this year (even if not deductible, they need to know that information) and 2) there is substantial postage cost in mailing 1098s on every loan.

#2. Refer to the top of the right hand column on page 1 for the definition of real property:

Instructions for 1098