Question on a friendly loan of about $50k - made to someone over last couple of years, at a straight rate of 5% - monthly payment is $215 - no principal payment.
So, for a given year, the interest is $215 x 12 = $2580
Since this was a freindly, off the radar loan, was just wondering how it could have been reported on both sides ?
Where would the borrower detail the interest payments made ?
Where would the lender detail the payments received ?
Not "could", *should*.
Depends on the purpose of the loan. If it is not formally secured by the borrower's real estate then the interest will only be deductible if the loan proceeds were used for business or investment purposes.
Schedule B and then to the Taxable Interest line for Form
1040, just like any other interest received.
where on Sched B ? without having a formal 1099 entry ?
In the interest income section.
Yes.
yeah, that's obvious - but with TurboTax rules - there is no way to enter just "interest" without it officially tie back to a 1099-xxx entry form, which is why I was looking for a line item to just enter misc interest...
Really? I hadn't noticed that. That is certainly not the case for TurboTax's big brother, Intel's ProSeries.
Are you sure you can't just go to Schedule B and type in payee and amount without overriding? If that isn't possible, I guess creating a dummy 1099 is your next step.
Overriding is a problem if you want to file electronically, at least in past year's TurboTax.
In TurboTax you can make interest entries directly in the "Interest Income Smart Worksheet" that is embedded in Schedule B. No override is needed. You can also use the
1099-INT form and just enter the payer's name and the amount of interest in box 1. The 1099-INT entry form is just a worksheet. It doesn't matter whether there is a corresponding actual Form 1099-INT or not.Bob Sandler
So, TurboTax is like its big brother.
I was pretty sure that was the case but I don't have TurboTax on my work computer to double check.
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