NNichols

"... we file a 1098 for a couple of P loans. According to IRC 72(p)(3) deductions are disallowed if the loan is ...secured by elective deferrals (we take the conservative road, so if any part of a loan is secured by elective deferrals then its not deductible). You can also read PLR 893018 & PLR 8742025. Letter 893018 sez that its ok to deduct the interest as long as its not disallowed under 72(p)(3) and the loan is secured by the residence. Those sites should serve as proof that you CAN deduct interest. I haven't found anything regarding the filing of Form 1098. Even if a 1098 isn't filed, a P should still be able to prove to the IRS all of the above and deduct. It wouldn't surprise me if a Trustee refused to file the 1098 due to administration headaches. I used Sal Tripodi's "ERISA Outline Book" while researching this question. " from Yahoo groups Tax professionals So if I pay in non deductible interest is it non taxable when it comes out?

from Yahoo groups Tax professional;s "... we file a 1098 for a couple of P loans. According to IRC 72(p)(3) deductions are disallowed if the loan is ...secured by elective deferrals (we take the conservative road, so if any part of a loan is secured by elective deferrals then its not deductible). You can also read PLR 893018 & PLR 8742025. Letter 893018 sez that its ok to deduct the interest as long as its not disallowed under 72(p)(3) and the loan is secured by the residence. Those sites should serve as proof that you CAN deduct interest. I haven't found anything regarding the filing of Form 1098. Even if a 1098 isn't filed, a P should still be able to prove to the IRS all of the above and deduct. It wouldn't surprise me if a Trustee refused to file the 1098 due to administration headaches. I used Sal Tripodi's "ERISA Outline Book" while researching this question. " So if I pay in non deductible interest is it non taxable when it comes out? Noel Nichols Chenango Business Services