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RD, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 8784
Experience:  CPA, MBA, Over 10 yrs of experience in tax planning and business consulting..
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I took out a mortage from BOA for 185,000 at 4.75% for 30 years,

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I took out a mortage from BOA for 185,000 at 4.75% for 30 years, The monthly amount is $1,000.
I lent the money to my son to pay for his business.
He pays me the $1,000 a month to pay for the mortage.
How do I report this on the 1040, I have a deduction for the interest paid on the mortage and then i show the $1,000 he pays me as income and what do I have to give him so he can claim the interest he pays me as a deduction on his 1040..

RD :

You will report the interest you receive from your son as interest income and you will have to report the interest you pay to Bank of America as an investment interest expense on Sch A.

RD :

He can claim the interest as a deduction. You do not have to issue him a Form 1099 INT as this is a personal loan and not a loan in the ordinary course of your business activity.

RD :

here is a link on who is required to issue Form 1099 INT

RD :

JACUSTOMER-l9svufxz- :

Will the interest income and the interest expense I have to calm, always be a wash? I retired last year and may have to take the standard dedution next year?

RD :

Investment interest expense will be claimed on Sch A. As long as your investment interest expense is higher than the standard deduction and the investment interest expenses is equal or less than the interest income than you can itemize and claim the deduction.

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