1098's And Subject To?
How do you guys handle 1098's with subject to deals? The lender files a 1098 on the seller/previous owner even though you have paid the loan, and likewise, your new buyer should receive a 1098 from you I think.. I realize that makes it a wash but what if the seller writes off the money on their taxes anyway since they've received the 1098 straight from the lender... ?
THG,
Glad to meet you.
Since you make an address change the 1098 from the lender comes to you or you Loan Servicing Company. If you sell with a Contract for Deed your buyer is entitled to the tax deduction and either you or your Loan Servicing Company issues the 1098 to your buyer.
The reason your seller does not claim the interest is because he did not pay the lender and if he does make a claim and gets caught committing a fraudulent act then that is between him and the IRS.
John $Cash$ Locke
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