For those of you that bought a new development. I am sure you placed a deposit in an escrow account held by the seller's lawyer. Did you get a 1099-int from the lawyer for this interest that you got at closing? My inital reaction is that this is taxable income to the buyer since the cash is under the social security of the buyer. (I have had friends that got interest back at closing but they... [more]
For those of you that bought a new development. I am sure you placed a deposit in an escrow account held by the seller's lawyer. Did you get a 1099-int from the lawyer for this interest that you got at closing? My inital reaction is that this is taxable income to the buyer since the cash is under the social security of the buyer. (I have had friends that got interest back at closing but they closed during the year it was opened). Or are there special rules around this that mean the interest is not taxable to the buyer and is consider a discount to the purchase price when it gets credited?
The account was open in 2006 and is still accuring interest. Per the bank a 1099-int was issued to the lawyer per what they claim. If I have to report it I need the lawyer to send me the 1099-int since there is a discrepency in interest rate based on what they are telling me and what the bank is telling me is in the account. (aka bank has way more interest in the account vs. the interest rate the lawyer quoted me interest is in excess of 6000% either that or they gave me the wrong rate since I assume the bank is correct)
Thanks.
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