I, as an LLC, purchased a business from an LLC and and it holds the loan on the sale. I need to know do I have to report the interest I pay to original LLC to the IRS on a 1099 or do they have to provide a 1099, or other form, showing the amount of interest they received from me?
I've not researched this extensively, but my understanding is that you would be required to furnish a 1099-INT to the lending LLC and IRS if you paid at least $600 in interest for the year. The 1099-INT instructions list a host of exceptions, the primary one that could be applicable here is that you don't issue 1099's to corporations, so if the lending LLC has elected to be taxed as a corporation then you wouldn't issue them a 1099-INT.
If the business purchase included real property then the lending LLC could be required to issue a 1098.
It's worth consulting your tax professional on this one, but regardless of whether or not you are required to furnish a 1099-INT, both parties should keep thorough documentation of payments that show interest and principal paid as it offsets the buyers business income and the interest counts as income to the seller/lender's LLC.