Interest Reporting Statement Due Date
Question
By which date must an interest reporting statement be sent to the borrower's last known address?
Answers
Explanations
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A. B. C. D.B
The requirement to provide an interest reporting statement to borrowers is governed by the Internal Revenue Service (IRS) regulations, specifically under Regulation Z of the Truth in Lending Act (TILA).
According to these regulations, mortgage servicers must provide a borrower with an annual statement of the interest paid on their mortgage loan for the previous year. This statement is known as Form 1098 and must be sent to the borrower's last known address.
The deadline for providing the Form 1098 to the borrower is January 31 of the year following the year the interest is paid, as per answer option B. However, if January 31 falls on a weekend or a legal holiday, the deadline is extended to the next business day.
It's important to note that mortgage servicers may also provide an electronic version of the Form 1098 to the borrower, but only with the borrower's prior consent. Additionally, mortgage servicers must file a copy of the Form 1098 with the IRS by February 28 of the year following the year the interest is paid.
In summary, the correct answer to this question is option B, January 31 of the year following the year the interest is paid.
