Welcome back! Ask questions, get answers, and join our large community of tax professionals.
cancel
Showing results for 
Search instead for 
Did you mean: 

On a new home purchase, we receive both the escrow and a 1098 from the mortgage company. Does this INCLUDE the escrow amounts that are tax and interest related?

Surfgolf
Level 2
In other words, does the tax and interest paid thru escrow on a new home purchase get put into the mortgage company's 1098 or is it a separate item?
0 Cheers

This discussion has been locked. No new contributions can be made. You may start a new discussion here

5 Comments 5
BobKamman
Level 15

Sometimes.   

My experience is that often, but not always, the funding lender sells the loan immediately to the permanent mortgage owner, or at least to the account servicing agent that may handle the funds even though the mortgage changes hands every year or two.  So you may receive two 1098 forms, from different companies at different times.  And your clients may not even recognize the name of the first one, so they may through it in the trash along with their EIP#2 debit card.  

If it's a $100,000 loan at 3%, you know that a full month of interest is $250 (to start), so if the 1098 from the current lender shows something close to $750 for three months, you know it doesn't include the $200 interest paid for 20 days at closing.  

sjrcpa
Level 15

Escrow amounts are just that. They are not expenses until paid from the escrow account.

Taxes and insurance are usually escrowed. Interest is not.

If you are talking about the prorated amounts up to the purchase date, then I agree with Bob.

The more I know, the more I don't know.
qbteachmt
Level 15

Get the Closing documents. It shows everything.

Oh, "we receive" does this mean you are using TurboTax? If so,

You seem to be lost on the internet.

You’ve come to a Peer User community for Intuit Tax Preparation products supporting tax preparation professionals using ProSeries, Proconnect and Lacerte , and you may be looking for support as an individual taxpayer. Please visit the TurboTax Help site for support.

Thanks.

 

*******************************
Don't yell at us; we're volunteers
BobKamman
Level 15

@sjrcpa 

My reading was that "escrow" meant the escrow company that buyer and seller hire to close the transaction.  It hold the seller's deed in escrow until the buyer and the buyer's mortgage company deposit the required funds in escrow.  Then it sorts it all out and shows its work on a HUD-1 or similar closing statement.  

0 Cheers
sjrcpa
Level 15

My interpretation was that it is the escrow account held by the lender to pay taxes and insurance-usually about 6 months of the estimated annual expense in my neck of the woods.

The more I know, the more I don't know.
0 Cheers