1099 IRS Rules
February 6th, 2008
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Question: Is interest on the deposit for a condo taxable?
Is the interest on the initial deposit for a new develpment condo taxable? The money was place in an interest bearing escrow account since last year, but to date I have not received a 1099-int from the seller’s lawyer. I am assuming that this interest will be returned to me at closing, but is that true? (I have friends that got their interest back but it was for a coop) so not sure if there are special rules on interest for these accounts.
The property is in NYC. Per the bank, I know that the interest is enough to generate a 1099-int but the amount differs from what it would have been if it was using the rate the seller lawyer quoted me. The difference is 6000% either that or they made a typo. I want to file what the IRS will see and if it is truely taxable to me. I don’t want to report anything that I will not be getting.
Answer: Of course. Uncle Sam always get’s his cut.
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