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Merlo
Merlo, Accountant
Category: Tax
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Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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In 2007 I lost my house to foreclosure, after having to declare

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In 2007 I lost my house to foreclosure, after having to declare bankruptcy. Countrywide, through its lawyer wanted $1,050,000 approx in full settlement to avoid foreclosure. This number included $71,000 for back interest. At settlement I was only able to pay $1,034,000 which was about $16,000 short. My calculations show that even though I was short, I paid about $54,000 in interest.
My question is two fold
Should I be able to claim this interest paid on my 2007 Tax return
If the answer to the above is yes, how can I get Countrywide to give me a 1099 for the interest paid
I've been trying now for nearly two years & spent countless hours talking & emailing Countrywide without any success
Hello dbarnes,

You do not actually have to have a 1098 form in order to deduct mortgage interest that you paid, although it is customary that the lender issues this form. It would be impossible for anyone here to give you advice or reasoning for Countrywide's decision not to issue the 1098, but it should not keep you from claiming the deduction.

You would simply list the mortgage interest paid on line 11 of Schedule A rather than on line 10. Include Countrywide's name and address as the person you paid the interest to. If you have their taxpayer ID number from a form they sent you in prior years, you should enter that information as well.

You will not be required to submit any proof with your tax return that you made these interest payments. However, if you for some reason were to be selected for an audit, you should keep documentation showing that you actually paid this interest, and that is all that will be required.

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Thank you dbarnes.

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