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?

Forum|Forum|5 years ago
January 28, 2021
2 replies
23 views

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?

ProConnect Tax

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Best answer by sjrcpa

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.

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.

sjrcpaAnswer

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.

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