Real Estate & 1098 Forms

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Question:

I understand that a 1098 is issued to an individual involving real estate. Is a 1098 issued to a payor when the real estate that is pledged is hypothecated?

Answer:

hy·poth·e·cate To pledge (property) as security or collateral for a debt without transfer of title or possession.<?i>

Reporting is required on any loan to an individual which is secured by a mortgage on real property; i.e. when real estate is pledged as collateral. See the Instructions for form 1098.

First published on BankersOnline.com 4/10/06