Client was in loan forbearance In 2022 loan was re-cast into a new mortgage to include all the interest that was not paid during the forbearance period. The 1098 statement from mortgage broker shows the amount of interest as the amount from 2022 plus what was not paid over the forbearance period. Not sure that the past years interest (not paid) can be deducted because it was added to a new re-cast mortgage. Am I missing something? Any Thoughts? Thanks
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Use the amount in box 1 of the 1098.
When the mortgage was recast. That’s unpaid forbearance interest was included in the total mortgage debt and therefore paid
Use the amount in box 1 of the 1098.
When the mortgage was recast. That’s unpaid forbearance interest was included in the total mortgage debt and therefore paid
Thanks - it was a large amount over what the normal interest would turn out to be.
I think this is what you are asking. Think of it a bit differently. Imagine that the entire prior debt, and the interest, all got paid by the new borrowing. Now they owe this new amount which is higher, and the outstanding interest was paid. That's why you see it on the 1098. It's like a refi with arrears.
Is the interest from forbearance qualifying mortgage interest?
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