Instructions For Form 1098 - 2013 (Page 4 of 4) in pdf

may report any reimbursement of overpaid interest that you are not

Additionally, the IRS encourages you to designate an account

otherwise required to report, but if you do, you are subject to the

number for all Forms 1098 that you file. See part L in the 2013

rules in these instructions.

General Instructions for Certain Information Returns.

The reimbursement must be reported on Form 1098 for the year

Box 1. Mortgage Interest Received from

in which the reimbursement is made. No change should be made to

Payer(s)/Borrower(s)

the prior year Form 1098 because of this reimbursement. Report the

total reimbursement even if it is for overpayments made in more than

Enter the interest (not including points) received on the mortgage

1 year.

from borrowers during the calendar year. Include interest on a

To be reportable, the reimbursement must be a refund or credit

mortgage, a home equity loan, or a line of credit or credit card loan

of mortgage interest received in a prior year that was required to be

secured by real property. Do not include government subsidy

reported for that prior year by any interest recipient on Form 1098.

payments, seller payments, or prepaid interest that does not meet

Only the person who makes the reimbursement is required to report

the exception explained under Prepaid Interest earlier. Interest

it on Form 1098. For example, if you bought a mortgage on which

includes prepayment penalties and late charges unless the late

interest was overpaid in a prior year, you made a reimbursement of

charges are for a specific mortgage service.

the overpaid interest, and the previous mortgage holder was

A cooperative housing corporation that receives any cash

required to report mortgage interest on Form 1098 in the prior year,

part of a patronage dividend from the National Consumer

you must file Form 1098 to report the reimbursement because you

TIP

Cooperative Bank must reduce the interest to be reported

are the one making the reimbursement.

on each tenant-stockholder's Form 1098 by a proportionate amount

Example. In 2011, you received $5,000 of mortgage interest from

of the cash payment in the year the cooperative receives the cash

the payer/borrower and reported that amount on Form 1098 for

payment. See Rev. Proc. 94-40, 1994-1 C.B. 711.

2011. In 2013, you determined that interest due on the mortgage for

2011 was $4,500, and the payer/borrower had overpaid $500. You

Box 2. Points Paid on Purchase of Principal

refunded the $500 overpayment to the payer/borrower in 2013. If

Residence

you received $600 or more of interest on the mortgage from the

payer/borrower in 2013, you must report the $500 refund in box 3 of

Enter points paid on the purchase of the payer of record's principal

the 2013 Form 1098. No change to the 2011 Form 1098 is required.

residence. For an explanation of reportable points, see Reportable

If, instead of refunding the $500 overpayment, you credited the

points earlier.

payer/borrower's 2013 mortgage interest payments due, $500 is still

shown in box 3, and the interest received from the payer/borrower in

Box 3. Refund of Overpaid Interest

2013 shown in box 1 must include the $500 credit.

Enter the total refund or credit of a prior year(s) overpayment of

Overpayment and reimbursement in same year. If you

interest. See Reimbursement of Overpaid Interest earlier.

reimburse interest in the same year it is overpaid, do not report the

Box 4. Mortgage Insurance Premiums

overpayment on Form 1098 as interest received during the year or

as a reimbursement of overpaid interest. For example, if the

Enter total premiums of $600 or more paid (received) in 2013,

borrower paid $5,000 and you reimbursed $500 of that amount in

including prepaid premiums, for qualified mortgage insurance.

2013, enter $4,500 in box 1 as interest paid by the borrower. Do not

Qualified mortgage insurance is mortgage insurance under a

enter the $500 reimbursement in box 3.

contract issued after December 31, 2006, and provided by the

Interest on reimbursement. A financial institution (or its

Department of Veterans Affairs, the Federal Housing Administration,

middleman) that pays interest of $10 or more on the reimbursement

or the Rural Housing Service (or their successor organizations), and

must report that interest (under section 6049) on Form 1099-INT,

private mortgage insurance, as defined by section 2 of the

Interest Income. Others that pay interest of $600 or more on the

Homeowners Protection Act of 1998 (as in effect on December 20,

reimbursement must report that interest (under section 6041) on

2006).

Form 1099-INT. Do not include such interest on Form 1098.

Receipt of $600 or more of mortgage insurance premiums is

determined on a mortgage-by-mortgage basis. Do not aggregate

Statements to Payers of Record

mortgage insurance premiums received on all of the mortgages of

If you are required to file Form 1098, you must provide a statement

an individual to determine whether the $600 threshold is met. You

to the payer of record. For more information about the requirement

do not need to report mortgage insurance premiums of less than

to furnish a statement to the payer of record, see part M in the 2013

$600 received on a mortgage, even though you receive a total of

General Instructions for Certain Information Returns.

$600 or more of mortgage insurance premiums on all of the

mortgages for an individual in a calendar year.

Recipient's/Lender's Name, Address, and

See Prepaid Mortgage Insurance earlier for the tax treatment of

Telephone Number Box

prepaid mortgage insurance premiums.

Enter the name, address, and telephone number of the filer of Form

Box 5. Blank Box

1098. Use this same name and address on Form 1096.

Enter any other item you wish to report to the payer, such as the

Payer's/Borrower's Name and Address Boxes

address of the property that secures the debt, real estate taxes,

Enter the name and address, in the appropriate boxes, of the person

insurance, or if you are a collection agent, the name of the person for

who paid the interest (payer of record).

whom you collected the interest. You do not have to report to the

IRS any information provided in this box.

Be careful to enter the recipient's and payer's information in

the proper boxes.

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Account Number

The account number is required if you have multiple accounts for a

payer/borrower for whom you are filing more than one Form 1098.

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Instructions for Form 1098 (2013)

Instructions For Form 1098 - 2013 Page 4

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