Amortization Schedule

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Expert, localized Los Angeles answers provided by Heather Roy

Amortization Schedule
	Ms. Lank: My wife and I bought and closed on my Dad's house late December of 2004. Although we were fortunate to pay most of the sale price in cash from the sale of our previous home, he proposed holding the remaining mortgage privately to help us out (what a guy!). The real estate attorney had his office generate a biweekly amortization schedule for an eight-year payoff. Then recently we both decided it would be too much of a pain to write checks and cash them twice a month. So I started sending him one payment a month. My tax preparer cautioned it might be best to have new amortization schedules generated for this year, one bi-monthly and one monthly since the interest amounts are slightly different. Our bank agreed to run the schedules a month ago, but nothing has been done yet. The schedules we need are more sophisticated than what I can find on free internet amortization calculators, and I'm too thrifty (my kids call it "cheap") to have our attorney's office run them again. Will the IRS nail us if we just use the original amortization schedule? How carefully do they scrutinize payment schedules of private mortgages?

	I’m not an accountant or a lawyer, so I feel free go out on a limb and guess that as the differences in total interest would be slight, the IRS will probably be content if you deduct as interest payments on this year’s tax return the same amount your Dad declares as income on his return. You can easily use an Internet site, though, to generate a simple monthly schedule to keep accurate track of interest from here on out.
	Edith Originally published on August 28, 2005

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