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My sister has a personal loan for the purchase of her manufactured home, issued by the owner. She'd like to be able to deduct the loan interest from her taxes.

As far as I can tell from IRS instructions, a contract that contains a loan to purchase a manufactured home is considered a mortgage, and the interest paid on that mortgage is deductible in federal taxes (we have no state tax).

Is it typical for a personal mortgage issuer to create a 1098? If not, as a payer is there a less formal method which is acceptable for declaring deductible loan interest for tax purposes?

If no 1098 is received, what recourse does one have to declare the interest to deduct?

Thanks!

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    She should ensure that she really wants to deduct mortgage interest (and other itemized deductions) rather than taking the standard deduction. Aug 4, 2023 at 11:43
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    extending @user4556274 's point since the standard deductions were raised a few years back, someone on a typical income for that type of home is unlikely to have enough itemizable expenses to exceed the size of the standard deduction. Aug 4, 2023 at 16:12
  • While this is certainly true, this falls out from the standard IRS forms. If the total of itemizations from Schedule A don't exceed the standard deduction, you'll take the standard deduction. And yes, in this instance that turned out to be the case (mostly because she didn't keep receipts for other potential deductions), thanks. Oct 18, 2023 at 20:03

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See the instructions for line 8b on your Schedule A, which exists for this scenario:

Seller financed mortgage.

If you paid home mortgage interest to the person from whom you bought the home and that person didn’t provide you a Form 1098, write that person's name, identifying number, and address on the dotted lines next to line 8b.

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  • Thank you very much. I presume we have to calculate that interest amount ourselves then. Aug 3, 2023 at 21:56
  • getting the identifying number is key. From the same paragraph " If the recipient of your home mortgage payment(s) is an individual, the identifying number is their social security number (SSN). Otherwise, it is the employer identification number (EIN). You must also let the recipient know your SSN." Aug 4, 2023 at 13:37

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