Tax Filings Due Jan. 31
Published: Tue, 06/10/08
BIBLES UNBOUND
You can send a Bible to someone who desperately wants one!
Visit Bibles Unbound, a ministry of Voice of the Martyrs, and see
how you can become a Bible Mailing Missionary:
www.BiblesUnbound.com
*****************************************************
Hello again ,
Do you know whether or not you must file a Form 1098 with the IRS
by the end of this month and provide one to your borrowers?
In this Bonus Lesson you'll find out. Our guest teacher is estate
and tax attorney Roger McClure. Roger is a long-time note and
real estate investor in Northern Virginia (D.C. area) and a published
author on real estate syndication. He was the attorney for
The Paper Source, Inc., and also my personal attorney
for the many years we lived in the D.C. area.
Until next time,
Bill
W. J. Mencarow
The Paper Source, Inc.
http://www.PaperSourceOnline.com
http://www.cashflows.org
P.S. The asterisks in the word "in*terest" in the article are there
to fool your spam filter; otherwise you might never see it.
**************************************************************
(adv.)
ANNOUNCING THE SECRETS OF PAPER 201
There is no better time than now to establish your note
business and sharpen your existing note business skills or get an
up to date refresher to make 2008 your most prosperous year ever in
the industry.
We asked note buyers, investors and funding sources what
they expect of a note broker and created this workshop off of their
suggestions. They want you to know how to get the story and
establish the note holder's need; how to determine the validity of
a transaction; to know how to use the calculator; and how to
package an accepted transaction properly.
Introducing NoteWorthy's newest Advanced Beginning Workshop
presented by the Editor of the NoteWorthy Newsletter, Jeff Armstrong,
a note broker and note investor with 17 years of experience in the
industry.
The 201 workshop is a live 3-day action-oriented workshop
concentrating on Marketing, Beginning Calculator Skills and
Negotiating. In the Secrets of Paper 201 workshop we will expand
on the note business process of how to Find note holders, Educate
them and Support them to earn your FEES. You will have a hands-on
workable knowledge of the note business. Once you learn the process
and follow the steps correctly you will earn your F.E.E.S. and be
able to repeat the process again and again.
February 8-10, 2008, Los Angeles, CA
NoteWorthy Subscribers $695?*
Spouse or Business Partner $395*
Call 800-487-1864 or visit www.armstrongcapital.com/SOP%20201.html
Secrets of Paper 201 is YOUR launching pad to becoming a
knowledgeable and sought-after note broker. You will walk out with
a marketing plan and the steps to move forward with your note
business!
*Secrets of Paper 101 is a prerequisite and can be ordered at
registration for an additional $99. If not a NoteWorthy
Subscriber, you can subscribe at registration for an additional $89
and save over 47% off of the standard workshop pricing!
****************************************************************
Where Are Your 1098s?
By Roger J. McClure, J.D.
Do you know whether or not you must file a Form 1098 with the IRS
and provide one to your borrowers?
There are general rules to follow:
1) If you or your company, corporation, partnership or trust
are in a trade or business and you receive mortgage inter*est
incident to your trade or business, and you or the entity receive
interest payments from individuals and any individual paid you
more than $600 in interest in a calendar year, you must provide
a Form 1098 by January 31 of each year to each individual who paid
you at least $600 of mortgage in*terest in the last year. You list
on the 1098 all of the interest received and send a copy to the IRS.
You must also file Form 1098 and 1096 with the IRS by February
28.
2) If you or your entity meet the qualifications under #1, you
do not have to report to the IRS or the payor any interest paid
by a corporation, trust, company, estate or other entity which is
not an individual.
3) If you meet the qualifications under #1, you only report
individuals whose mortgage in*terest payments generate more than
$600 per mortgage in one calendar year.
4) If you or your entity are not in a trade or business or
your receipt of mortgage in*terest is not incident to a trade or
business, then you do not have to send in Form 1098 to the IRS
or your borrowers.
Example 1. You buy, hold and sell mortgages from time to time.
You usually only have about three or four mortgages during the year
which you hold in your name. You report your interest income on
Schedule B and your interest and other expenses on Schedule A.
This amount of activity does not rise to a trade or business but
is an investment activity.
Example 2. You formed a corporation, licensed it as a mortgage
lender, and set up an office in your home. Your spouse works
and the lending corporation is your main source of income. You
make about 100 loans a year and borrow a large part of your
capital. This constitutes being in a trade or business and you
must provide 1098s to your qualifying non-corporate borrowers
and to the IRS.
Example 3. The same facts as Example 2, but five of the mortgages
you hold each paid less than $600 in mortgage in*terest. You report
none of the payors who paid less than $600 of mortgage in*terest in
the last calendar year.
Example 4. Your corporation's pension fund buys and holds to
maturity about 10 mortgages and continues to buy more as the pension
fund grows. The pension fund is a passive investor, not intending
to be in a trade or business. The pension fund provides no 1098s
to anyone.
Example 5. You have a small loan company which you conduct as a
side business from your regular job. It is not incorporated and
you report its income and expenses on a Schedule C. You buy, sell
or hold about 10 to 15 mortgages a year. You want to be viewed by
the IRS as in a trade or business so that you can deduct the
expenses of conducting your loan business on a Schedule C.
Because you want to be treated for all purposes as conducting
a trade or business, you provide 1098s to your qualifying
non-corporate borrowers and the IRS.
The critical elements in mortgage in*terest reporting are that
you or your entity must be engaged in a trade or business and
your receipt of mortgage in*terest is incident to that trade or
business. You or your entity do not have to be in the trade or
business of mortgage lending. The loan servicer who has sufficient
information to report mortgage in*terest subject to the Section
6050H reporting requirement must report it.
If you do not make the required 1098 reports, you can be
subject to a fine of $50 per form up to $100,000. In general,
if you cannot determine whether you are or are not receiving
mortgage in*terest incident to a trade or business, it is best
to file the reports to avoid the penalties and to add further
support to your claim for the deduction of your lending business
expenses.
Roger J. McClure is a note and real estate investor and a
practicing lawyer with over 30 years of experience with individuals,
families, government and businesses.
He is the author of several books, including one on real estate
syndications published by Prentice-Hall. He is a Director
of the Business Enterprise Institute and Dean of the Business
College of NNEPA.
Roger grew up in the Midwest (Columbus, Ohio) where he graduated
with honors with a Juris Doctorate from the Ohio State University
School of Law. He also holds an MA from Northwestern University.
He served in military intelligence as a First Lt. in Vietnam,
receiving a bronze star.
Roger has tried civil and criminal cases before state and federal
courts and administrative proceedings before the FTC and FERC.
Roger investigated acquistions, mergers and business combinations
while at the Federal Trade Commission where he led a case
eliminating shared board of directors between Banks and Savings and
Loan Associations. At the Federal Energy Regulatory Commission, he
represented cities and power companies in electric and natural gas
proceedings where he won a case against one of the largest energy
companies.
He has been prominent in many business associations, having served
as President of the Northern Virginia Apartment Association.
Roger publishes widely and speaks frequently; he was a live radio
talk show host on real estate for four years on a major Washington,
D.C. radio station. He has been a featured speaker at many PAPER
SOURCE seminars and conventions.
Roger was elected five times and served ten years as a Delegate in
the Virginia state legislature.
Contact him at www.wealthcounsellors.com
e-mail: roger@wealthcounsellors.com
phone: 571-633-0330
*************************************************************
LONNIE SCRUGGS' NEW BOOK IS HOT OFF THE PRESS!
"Taking The Mystery Out Of Money"
If you depend on a "job", then you need to learn
what financially successful people do...make your money work for
you. Lonnie Scruggs' brand-new book shows you how to work smart by
doing a little work one time, and getting paid for a long time.
"TAKING THE MYSTERY OUT OF MONEY" shows you how to do that.
Read about it at www.papersourceonline.com/mystery.htm
Taking The Mystery Out Of Money Is Loaded With Case Histories &
Examples To Help You Understand Money & Finance So You Can Reach
Your Financial Goals.
Just Some Of The Topics Covered In This 253-page Book:
· How To Use A Financial Calculator
· Power Of Compounding Of Interest
· How Many Doubles Do You Have
· How To Create Notes & Cash Flow
· How To Use Notes To Buy & Sell
· How To Improve Notes For Better Yield
· How To Buy Notes In Pieces
· How To Make Big Yields From Little Deals
· Making Hard Money Loans
· Profits From Prepayments
· Time Value Of Money
· Rule Of 72
· Understanding CAP Rates
· Simple Interest vs Compound Interest
· Difference Between Yield & Discount
· How Much Does That New Car Really Cost?
· New Car Or ROTH IRA?
· Money Is Not The Problem.
· Is Being Poor Heredity?
· Job Security Or Financial security?
· Coulda--Shoulda--Woulda
· Who's Planning Your Retirement?
Order Your Copy Now & Learn How To Fire Your Boss
www.papersourceonline.com/mystery.htm
If You Get Ri*ch While You're Young,
You Can Have A Blast Growing Old!
*************************************************************