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Interest Reporting on Secondary Residence

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Is it necessary to report mortgage interest paid on form 1098 if the real estate is not a principal residence?

Yes, if the primary obligor on the loan is an individual. The test for reporting mortgage interest on IRS Form 1098 is not the type of loan, the type of real estate held as collateral, the lien position (first or junior lien) or whether the real estate is primary or incidental collateral. The only tests are:

  1. Is there real estate collateral on the loan?
  2. Is the primary obligor an individual?
  3. Is the interest amount paid at least $600?

If the answer to all three questions is "Yes," the interest is reportable on Form 1098.

First published on 3/19/07

First published on 03/19/2007

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