Pacun Posted February 25, 2011 Report Share Posted February 25, 2011 I have a client, his 1098 shows $10K mortgage insurance. I asked him to call the bank and find out if it was prepaid. Bank said yes. I amortized. I have another client, his 1098 shows $6K morgage insurance. Client called the bank and they said that since it shows on the 1098 in 2010, it is not prepaid and that I should know that. How do we know if it is prepaid? Do you think there is an amount that will hint us if this is prepaid? Quote Link to comment Share on other sites More sharing options...
clay Posted February 26, 2011 Report Share Posted February 26, 2011 My experience has been that the amount shown on a 1098 is not prepaid, it is the current year charges. One client had the details of each monthly mortgage payment and there was a charge for MIPS. Another client called the bank and was told it was just a cost of getting the mortgage. Another client had the mortgage sold 3 times in one year and there was a MIPS from each bank, and the amounts were very small. Based on my experience, the practice of "prepaid" as mentioned in the instructions is the exception and not the rule. Quote Link to comment Share on other sites More sharing options...
Randall Posted February 26, 2011 Report Share Posted February 26, 2011 Wouldn't such large amounts be prepaid? It seems high to be just for one year. But I too wonder how are we supposed to know. Quote Link to comment Share on other sites More sharing options...
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