Here's the situation - Client has earnest money put down on a property to purchase. Closing takes longer than expected, so client graciously makes the sellers loan payment @ bank. Property has now closed, this amt was not addressed anywhere. So, since it was made on behalf of the seller, what should it be expensed to on purchaser's side? AND, should that amt be reported on 1099 as "income" to the seller (my thinking is that he will get the benefit of the interest that was paid, plus he rec'd more $ @ closing because of the principal that had been paid.
(background - I'm a fullcharge bookkeeper, but sometimes I run into situations I'm not exactly sure about. Tax preparer on this acct is an EA and I'm not sure he could answer my question. TIA!) N Owen