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<<I purchased a new home in 1999 and the builder paid the fees associated with the 2-1 buydown loan. The money is held by my mortgage company and applied to my monthly mortgage payment. When I received my mortgage interest statement from my mortgage company it indicated the amount of interest that I paid in Box 1. However, the 1098 also showed a 1999 interest detail where it shows my interest payments and the buydown payments, which are listed as "Buydown/Subsidy payments.>>

Ok...

<<My question is, can I deduct this interest (buydown payments) even though it was actually paid by the seller? I assume it wasn't reported to the IRS since it is not reflected in box 1 on the 1098.>>

Now I'm confused. Does the Form 1098 show only the interest that YOU paid? Or does it show the total of the interest that YOU paid AND the buydown interest paid by the builder?

I believe that the only deduction that YOU are entitled to...which would be the interest that you paid...and not any of the interest/buydown paid by the builder.

But I also don't have all of the paperwork regarding the transaction. There may be something in there where you actually paid the buydown indirectly somewhere or somehow.

TMF Taxes
Roy

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