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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
Mortgage Defined
A mortgage is any obligation secured by real property.
Use the Obligation Classification Table to determine
which obligations are mortgages.
Real property is land and generally anything built on it,
growing on it, or attached to the land. Among other things,
real property includes a manufactured home with a
minimum living space of 400 square feet and a minimum
width of more than 102 inches and which is of a kind
customarily used at a fixed location. See section 25(e)
(10).
If the loan is not secured by any real property, you are
not required to file Form 1098. However, the borrower
may be entitled to a deduction for qualified residence
interest, such as in the case of a loan for a boat. The boat
must have sleeping space, cooking facilities, and toilet
facilities. The borrower must use the boat as a home.
Lines of credit and credit card obligations. Interest
(other than points) received on any mortgage that is in the
form of a line of credit or credit card obligation is
reportable regardless of how you classified the obligation.
A borrower incurs a line of credit or credit card obligation
when the borrower first has the right to borrow against the
line of credit or credit card, whether or not the borrower
actually borrows an amount at that time.
Who Must File
File this form if you are engaged in a trade or business
and, in the course of such trade or business, you receive
from an individual $600 or more of mortgage interest (or
$600 or more of MIP, if section 163(h)(3)(E) applies for
the reporting year) on any one mortgage during the
calendar year. See the instructions for
box 5, later, for MIP
reporting requirements. You are not required to file this
form if the interest is not received in the course of your
trade or business. For example, you hold the mortgage on
your former personal residence. The buyer makes
mortgage payments to you. You are not required to file
Form 1098.
For information about who must file to report points,
see
Who must report points, later.
Not in the lending business. If you receive mortgage
interest of $600 or more in the course of your trade or
business, you are subject to the requirement to file Form
1098, even if you are not in the business of lending
money. For example, if you are a real estate developer
and you provide financing to an individual to buy a home
in your subdivision, and that home is security for the
financing, you are subject to this reporting requirement.
However, if you are a physician not engaged in any other
business and you lend money to an individual to buy your
home, you are not subject to this reporting requirement
because you did not receive the interest in the course of
your trade or business as a physician.
Governmental unit. A governmental unit (or any
subsidiary agency) receiving mortgage interest from an
individual of $600 or more must file this form.
Cooperative housing corporation. A cooperative
housing corporation is an interest recipient and must file
Form 1098 to report an amount received from its
tenant-stockholders that represents the
tenant-stockholders' proportionate share of interest
described in section 216(a)(2). This rule applies only to
tenant-stockholders who are individuals and from whom
the cooperative has received at least $600 of interest
during the year. See the
TIP under box 1, later.
Collection agents. Generally, if you receive reportable
interest payments (other than points) on behalf of
someone else and you are the first person to receive the
interest, such as a servicing bank collecting payments for
a lender, you must file this form. Enter your name,
address, TIN, and telephone number in the recipient entity
area. You must file this form even though you do not
include the interest received in your income but you
merely transfer it to another person. If you wish, you may
enter the name of the person for whom you collected the
interest in box 10. The person for whom you collected the
interest need not file Form 1098.
However, there is an exception to this rule for any
period that (a) the first person to receive or collect the
interest does not have the information needed to report on
Form 1098, and (b) the person for whom the interest is
received or collected would receive the interest in its trade
or business if the interest were paid directly to such
person. If (a) and (b) apply, the person on whose behalf
the interest is received or collected is required to report on
Form 1098. If interest is received or collected on behalf of
another person other than an individual, such person is
presumed to receive the interest in a trade or business.
Foreign interest recipient. If you are not a U.S. person,
you must file Form 1098 if the interest is received in the
United States. A U.S. person is a citizen or resident of the
United States, a domestic partnership or corporation, or a
nonforeign estate or trust. If the interest is received
outside the United States, you must file Form 1098 if (a)
you are a controlled foreign corporation, or (b) at least
50% of your gross income from all sources for the 3-year
period ending with the close of the tax year preceding the
receipt of interest (or for such part of the period as you
were in existence) was effectively connected with the
conduct of a trade or business in the United States.
Designation agreement. An interest recipient, including
a recipient of points, can designate a qualified person to
file Form 1098 and to provide a statement to the payer of
record.
A qualified person is either (a) a trade or business in
which the interest recipient is under common control as
specified in Regulations section 1.414(c)-2, or (b) a
designee, named by the lender of record or by a qualified
person, who either was involved in the original loan
transaction or is a subsequent purchaser of the loan.
A lender of record is the person who, at the time the
loan is made, is named as the lender on the loan
documents and whose right to receive payment from the
payer of record is secured by the payer of record's
principal residence. Even if the lender of record intends to
sell or otherwise transfer the loan to a third party after the
close of the transaction, such intention does not change
who is the lender of record.
The agreement must be in writing, identify the
mortgage(s) and calendar years for which the qualified
person must report, and be signed by the designator and
the designee. A designee may report points on Form 1098
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Instructions for Form 1098 (Rev. 01-2022)