Question


Miss Kn...

I am carrying a business loan for someone - what tax doc do I provide at year-end?

I sold my sole-proprietor business on 1/31/09. I am carrying the loan on it for 5 years. The new owner pays me monthly at a fixed interest rate. I assume I need to provide her with a document at the end of the year stating total interest paid for her own tax purposes. I don't have a EIT, but just my SSN. Is there a specific tax document that I need to download and fill out or do I just put together a letter stating interest paid and my info and hers?

1 month ago - 4 answers

Best Answer

Chosen by Asker

you will furnish her a 1099 I(for interest) your sole proprietorship was in your SS# and that is what you will use these forms cannot be downloaded, you have to request them because the cover, form 1096 is printed in scannable print and cannot be copied www.irs.gov and request them

by tro

1 month ago

Asker's Rating: 

Other Answers

u need to give that person a statement showing the interest paid by her for the year, so that she can deduct for her taxes. meanwhile, if the interest received by you is higher than what u pay to yoru creditor, you need to report the net interest income.

by T E- 1 month ago

Actually you report all of the interest income on schedule B and the interest paid (if any) by you on schedule A.

by the tax lady- 1 month ago

You report the interest paid on your Schedule B and show the name and SSN of the person who paid you. They will need your name and SSN at audit since this is a business loan and not reported on their Schedule A. The person who pays you the interest may possibly provide you with a Form 1099-INT. You would only need to provide them with a statement that showed how much interest was paid.

by Bash Limpbutt's Oozing Cyst©- 1 month ago