Part 1 - Tracking borrowers that are 1098 recipients

The Lender will need to identify which payment accounts require IRS 1098 reporting. There is a helpful report, located in Reports & Letters, to assist in identifying potential 1098 reporting borrowers called "Payments: Potential 1098 Reporting." This report IS NOT showing the Lender which borrowers require 1098 reporting, instead it is simply identifying Indiv/Sole Prop borrowers who have real estate collateral types within their record. Ultimately, it is the Lenders responsibility to identify and mark which borrowers should be included in the 1098 Report.

 

   For each payment account that applies follow the instructions below. Note, this is a one time process:

   1) Go to Payments > Tax Reporting menu within a loan record

   2) Mark the checkbox "Generate IRS Form 1098 for this account"

   3) Fill out related information in the section that opens up

   4) Click Save

Part 2 - Generating the 1098 Report

The Lender will generate an excel report from Ventures with all indicated 1098 recipients listed. This report will then be used by the Lender to either file manually, send to accounting, or use with an outside vendor that will file for Lender.

 

   To generate report follow the instructions below:

   1) Go to Main Menu Payments tab > Reports

   2) Click on 1098 Report

   3) Select calendar year and Organization to include in report

   4) Click Run Report

   5) Excel will download to local desktop

 

A video summarizing Part 1 and Part 2 can be viewed HERE.

 

***IMPORTANT***

Q: What makes up the reported interest amount?
A: Interest paid for the year plus any prepayment penalties paid. Late fees are reported in a separate column within the report. The toggle located in the Payments main menu > Settings menu, called "Include Late Fees in Tax Reporting" does not affect this report. Lender will need to manually add late fee amount to interest paid, if they desire to do so. 

 

Q: How do you account for payments that were made prior to using Ventures?
A: When loan payment accounts are boarded as an existing loan or were imported, there is a section labeled Tax Reporting Fields within the Payments > Loan Details menu that provides the ability to enter YTD Interest Paid and YTD Late Fees.  The YTD field is then added to the interest paid calculated in Ventures for the year to compute the full total for reporting. If this information was not entered, Ventures will only calculate payments that have posted to it’s system. If you imported this information, it will be included in the calculation.

 

Q: How do I keep a record of the 1098 interest amounts that were reported for 2022?

A: Lender can keep a copy of the generated report on file. Additionally, when filing the IRS 1098's Lender receives Copy C for their record with reported amounts. If Lender retroactively makes changes to payment transaction history and regenerates the report, the report amounts will reflect whatever has been currently posted.