MORTGAGE BROKERS ARE SUBJECT TO POINTS-REPORTING REQUIREMENT.
Rev. Rul. 92-2; 1992-1 C.B. 360
- Institutional AuthorsInternal Revenue Service
- Cross-Reference
Section 6050H. -- Returns Relating to Mortgage Interest (and Points)
Received in Trade or Business from Individuals
26 CFR 1.6050H-1: Information reporting of mortgage interest received
in a trade or business from an individual.
- Code Sections
- Subject Areas/Tax Topics
- Index Termsmortgage interest, returns
- Jurisdictions
- LanguageEnglish
- Tax Analysts Document NumberDoc 91-10830
- Tax Analysts Electronic Citation91 TNT 262-9
Rev. Rul. 92-2
ISSUE
If points are received directly or indirectly by a mortgage broker in connection with the financing of the purchase of a principal residence, are they reportable under section 6050H of the Internal Revenue Code?
LAW AND ANALYSIS
Section 6050H(b)(2)(C) of the Code provides that persons who are required under section 6050H(a) to file an information return (Form 1098, Mortgage Interest Statement) to report the receipt of interest on a mortgage during the calendar year must report the amount of points received during the calendar year. This points reporting requirement applies to information returns the due date for which (determined without regard to extensions) is after December 31, 1991.
The purchaser of a principal residence may obtain financing for the purchase from a lender through a mortgage broker. In connection with the financing, the purchaser may be charged points, some portion of which may be paid directly or indirectly to the broker.
HOLDING
Points that are received directly or indirectly by a mortgage broker in connection with the financing of the purchase of a principal residence are reportable under section 6050H of the Code to the same extent as if paid to and retained by the lender. See Notice 90-70, 1990-2 C.B. 351, regarding information reporting under Code section 6050H(b)(2)(C); Rev. Proc. 92-12, 1992-3 I.R.B. ___, regarding certain amounts that will be treated as points that are deductible for the taxable year during which they are paid by a cash basis taxpayer; and Rev. Proc. 92-11, 1992-3 I.R.B. ___, regarding who must report points and a safe harbor amount of points that may be reported.
DRAFTING INFORMATION
The principal author of this revenue ruling is Douglas Fahey of the Office of Assistant Chief Counsel (Income Tax and Accounting). For further information regarding this revenue ruling, contact J. Peter Baumgarten on (202) 377-9583 (not a toll-free call).
- Institutional AuthorsInternal Revenue Service
- Cross-Reference
Section 6050H. -- Returns Relating to Mortgage Interest (and Points)
Received in Trade or Business from Individuals
26 CFR 1.6050H-1: Information reporting of mortgage interest received
in a trade or business from an individual.
- Code Sections
- Subject Areas/Tax Topics
- Index Termsmortgage interest, returns
- Jurisdictions
- LanguageEnglish
- Tax Analysts Document NumberDoc 91-10830
- Tax Analysts Electronic Citation91 TNT 262-9