1098 Mortgage Interest Reporting

Important: The Form 1098 feature must be enabled by Vantaca. Reach out to your CSM for access. 

Vantaca's 1098 Mortgage Interest Reporting feature enables co-op communities to efficiently generate and manage Form 1098 Mortgage Interest statements for homeowners. This form reports mortgage interest paid by a borrower (if it is $600 or more), real estate taxes, and mortgage insurance premiums or points during the tax year to the IRS.

In traditional residential settings, lenders file Form 1098 for individual mortgages. Co-op properties operate differently with each unit representing shares in a corporation that holds a shared mortgage for the entire building. While Vantaca does not hold mortgages or track individual mortgage records, the 1098 feature allows co-op management companies to generate these required tax forms based on each homeowner's proportional share of the building's mortgage interest and real estate taxes.

Note: The association must provide the mortgage balance information to Vantaca, as this data is not automatically available in the system. You can import this information in bulk or enter it manually for each mortgage record.

The 1098 workflow supports homeowners' tax filing requirements while ensuring compliance with IRS regulations. The system uses the primary homeowner's SSN or EIN to file the form and automatically calculates per-homeowner amounts based on share allocation.

Form 1098 must be sent to each primary homeowner by the end of January so they can use it to complete their taxes:

• December: You sill receive Share Calculations from your CPA.
• Early January: Create mortgage records in Vantaca.
• January 31st: IRS Deadline.

Workflow:

• Association > 1098 Balances: Select the mortgage records to export.
• Click Close and Create Export File for Submission: This creates the action item in the Reports tab.
• Review the generated file and click Step to Send the information to Nelco.


 

Contents

• Enable Role Securities and Permissions
• Set Up 1098 for Your Association
  • Enable 1098 for an Association
  • Add Homeowner Information
• Import Mortgage Balances
  • Import Mortgage Balance Data
• Manage Mortgage Records
• Create and Edit Mortgage Records
• Ownership Transfers and Proration
  • Automatic Proration Process
  • Review Prorated Records
• Generate, Review, and Send 1098 Forms
  • Reopen Closed Mortgage Records
  • Delete Mortgage Records
• FAQs
• Troubleshooting



Enable Role Securities and Permissions

You can add the ability to use 1098 functionality and import capabilities to any role:

1. Navigate to Settings > Roles. 
   The Roles page displays.
2. Search for the role that you want to allow to use 1098 functionality. 
   For example, in the following image, the user wants to allow Administrators to use this feature and enters admin in the search field to display all roles that include the word "admin". 
   
   
   
3. Click the caret next to the role name to open it (ensure the Security tab is selected).
4. Go to the Association section and click Edit next to 1098. 
   The Edit Role Security screen opens. 
   
   
   
5. Select the desired security permissions according to the functions you want the role to perform.
6. Click Save changes.
7. Do the same for the roles you want to allow to import and update share information by navigating to the Import section and clicking Edit next to:
   • 1098 Mortgage Balance: Select Append to be able to import the template.
   • 1098 Shares: Select Update to be able to change 1098 shares for homeowners.
      

Set Up 1098 for Your Association

Before you can generate 1098 forms, you must configure your association with the required information.



Enable 1098 for an Association

To enable 1098 functionality for an association:

1. Navigate to Association > Association List.
2. Click Edit next to the association you want to allow to send 1098 forms. 
   The Edit Association screen displays.
3. Provide the following information:
   
   
    
   • Send 1098: Select to enable 1098 functionality for the association.
   • Total # of Shares: Enter the total number of shares for the entire association. This value is used to validate that the sum of all homeowner shares matches the association total. 
     Note: The Total # of Shares field validates against the sum of all homeowner shares. If the totals do not match, you will receive a validation error when attempting to generate 1098 forms.
4. Click Update.



Add Homeowner Information

Each homeowner in a Co-op association must have their share allocation recorded before you can generate 1098 forms.

To add or update homeowner shares:

1. Navigate to Homeowners > Homeowner List.
2. Click Edit next to the homeowner you want to update. 
   The Edit Homeowner screen displays.
3. Provide the following information:
   
   
    
   • 1098 Shares: Enter the homeowner's number of shares (supports up to 2 decimal places). Important: When you populate the 1098 Shares field for a homeowner, Vantaca automatically generates a mortgage record for that homeowner. You can then update the mortgage balance information as needed. You can also bulk add this information using the 1098 Shares import template found in the "Import Templates" article.
   • EIN or SSN: The EIN or SSN (only enter one or the other) of the primary owner that the Form 1098 is filed under. Note that Vantaca encrypts this data and only shows the last four digits. You can also bulk add this information using the Account EIN/SNN import template found in the "Import Templates" article.
4. Click Update.
    

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Import Mortgage Balances

You can import the associations mortgage balance records using the 1098 Mortgage Balance Import template. This streamlines the process of updating mortgage balances across your portfolio and ensures that each property's mortgage information is calculated according to the number of shares it owns.

Important: Ensure that you enter all homeowner shares before you import mortgage balances. The system requires complete share allocation to accurately calculate per-homeowner amounts.

After you complete the import, the mortgage and tax information for each lender displays in the system, and you can drill down to each property in the association to view its specific information.

For detailed information about import templates and procedures, see the "Import Templates" article.

 

Import Mortgage Balance Data

To import mortgage balance information:

1. Navigate to Settings > Import. 
   The Imports screen opens.
2. Click the Imports tab.
3. Click New Import. 
   The New Import screen displays. 
4. Provide the following information:
   
   
   • Import Type: Select 1098 Mortgage Balance Import.
   • Import Mode: Select Append.
   • Tax Year: Select the year for which you want to import mortgage balance information.
   • Import File: Click Select files and upload your completed template.
5. Review the imported information displayed on the screen.
6. Click Save.

After the import completes successfully, the mortgage balance information updates for all homeowners included in the import file.

Manage Mortgage Records

After you set up 1098 functionality and add homeowner share information, Vantaca automatically generates mortgage records. You can view and edit these records as needed.

You may need to edit mortgage records to correct errors or override system calculations before generating and filing 1098 forms. Common reasons to edit mortgage records include:

• Correcting import errors or data entry mistakes.
• Updating information received after initial entry.
• Manually overriding system-calculated amounts when needed.
• Adjusting amounts based on lender or borrower documentation.
   

Create and Edit Mortgage Records

To create and edit mortgage records for an association:

Note: You cannot edit mortgage records that have been closed and exported. To make changes to a closed record, you must first reopen it.

1. Navigate to Association > 1098 Balances. 
   The 1098 Balances page displays mortgage records for all homeowners in associations where 1098 is enabled. It includes the following columns: 
   
   
   
   • Lender: The name and tax identification information of the entity receiving mortgage interest payments (in Co-ops, this is typically the financial institution holding the building's mortgage).
   • Lender TaxID: The lender's Tax Identification Number (TIN) required for IRS reporting.
   • Association: The association name.
   • Status: The mortgage record status:
   • Open: The mortgage record is active and can be edited. You can update balance information and regenerate forms.
   • Closed: Displays the XN associated with the 1098 export record. The record has been finalized and cannot be edited unless reopened. Closed records do not update automatically with ownership changes.
   • Outstanding Balance: The outstanding mortgage principal as of January 1 of the current year. If the mortgage originated or was acquired during the current year, this reflects the principal as of the origination or acquisition date.
   • Origination Date: The date the mortgage was originally issued by the original lender.
   • Interest Per Share: The mortgage interest amount allocated to each share owned by the homeowner (Vantaca calculates this based on the homeowner's proportional share of the building's total mortgage interest).
   • Real Estate Taxes Per Share: The real estate tax amount allocated to each share owned by the homeowner (based on proportional share allocation). This information is reported in Box 10 of Form 1098 and represents deductible real estate taxes paid on the cooperative property.
   • Mortgage Insurance: Mortgage insurance premiums (MIP) paid during the tax year.
   • Refund of Overpaid Interest: The total refund or credit of prior years overpayment of mortgage interest. If a homeowner overpaid interest in a previous year and received a refund or credit in the current year, it must be reported here.
   • Points Paid: Points paid by the homeowner in connection with the purchase of a principal residence. Points are prepaid interest charges that may be tax-deductible.
2. Use the filters to narrow results by association, status, or other criteria.
3. Click Mortgage Record to create a new record or Edit next to the record you want to change (you can only edit an Open status). 
   The Edit screen opens. 
   Tip: Enable Additional Fields to see the entire screen. 
4. Update the fields as needed with the exact values from your CPA letter:
   Note: You can update in bulk using the 1098 Mortgage Balance Import.
   
   
    
   • Tax Year: The calendar year for which the mortgage interest and related expenses are being reported. This must match the tax year for which the homeowner will file their federal tax return.
   • Mortgage Interest Per Share: The proportional share of total mortgage interest received by the lender during the tax year, allocated to each shareholder based on their ownership percentage in the cooperative housing corporation.
   • Real Estate Taxes Per Share: The proportional share of real estate taxes paid on the property during the tax year, allocated to each shareholder based on their ownership percentage. In cooperative housing, shareholders may deduct their proportional share of real estate taxes paid by the association. This amount is reported in Box 10 of Form 1098. When real estate taxes equal $0, this field is not populated on the submitted form.
   • Mortgage Origination Date: The date when the mortgage loan was first established. This date typically does not change unless the mortgage is refinanced.
   • Outstanding Mortgage Principal: The remaining principal balance on the mortgage as of January 1 of the tax year (or as of the origination date if the mortgage started during the year).
   • Association: The name of the cooperative housing corporation or homeowners association that holds the mortgage. This represents the borrower entity responsible for the mortgage obligation, with shareholders having proportional responsibility.
   • Lender: The financial institution or entity that holds the mortgage and receives the interest payments. This is the mortgage servicer or lender of record.
   • Mortgage Insurance Premium Per Share: The proportional share of mortgage insurance premiums paid during the tax year, allocated to each shareholder. This field is divided by shares to determine each owner's portion.
   • Refund of Overpayment of Mortgage Interest Per Share: The proportional share of any interest refund or credit issued for overpayments made in prior years, allocated to each shareholder.
   • Points Paid on Mortgage Per Share: The proportional share of points (prepaid interest) paid at closing for the purchase of the principal residence, allocated to each shareholder.
5. Click Save. 
   Vantaca automatically multiplies the per share amounts by each unit's shares to calculate individual homeowner 1098 amounts. 
   Example: If mortgage interest is $25.35 per share and unit 5B owns 40 shares, that homeowner's deductible interest is $1,014.
    

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Ownership Transfers and Proration

When ownership of a Co-op property transfers during the year, Vantaca automatically prorates the mortgage interest and related amounts based on the ownership period for each homeowner.



Automatic Proration Process

Vantaca uses the settlement date recorded in the ownership transfer to calculate the appropriate proration. This only happens when the transfer occurred during the same tax year as being reported.

Important: Settlement dates must be recorded accurately in the ownership transfer process to ensure proper proration calculations.

• When you record an ownership transfer with a settlement date, the system identifies the affected 1098 mortgage record.
• The original homeowner's mortgage record automatically updates to reflect amounts only through the settlement date.
• A new mortgage record generates for the new homeowner, reflecting amounts from the settlement date forward.
• Both homeowners receive accurate 1098 forms reflecting their respective ownership periods.
   

Review Prorated Records

To review records after an ownership transfer:

Note: Closed mortgage records remain frozen when settlement dates change. Only open mortgage records will automatically update when ownership information changes.

1. Navigate to Association > 1098 Balances.
2. Filter by the association or property where the ownership transfer occurred.
3. Review the mortgage records for both the previous owner and new owner. 
   Tip: You can add Settlement Date and Previous Owner Date columns and look for duplication of the property address in the records.
4. Verify that the amounts reflect the appropriate proration based on ownership periods.



Generate, Review, and Send 1098 Forms

Follow the instructions in the "Electronic Reporting through Nelco (1098 & 1099)" article. 
 

Reopen Closed Mortgage Records

If you need to make changes to a closed mortgage record, you can reopen it.

To reopen a closed mortgage record:

1. Navigate to Association > 1098 Balances.
2. Select the closed mortgage record you want to reopen.
3. Click Reopen.

After reopening:

• The status changes to Reopened.
• You can edit the mortgage record information. 
• You can regenerate the 1098 form with updated information.

Important: After making changes to a reopened record, you must regenerate the 1098 file to create an updated version with the corrected information.
 

Delete Mortgage Records

On the 1098 Balances screen, click Delete next to any mortgage record that you want to remove as long as it is open status.



Export Information

Click Export to Excel to export all of the information from the 1098 Balances screen to an Excel spreadsheet. the spreadsheet uses the processing company's column headings and may include additional columns. You can add more information manually if you like.



FAQs

General Questions

Q: Which types of communities can use 1098 functionality?

A: Currently, 1098 functionality is available for co-op communities with share-based ownership structures and traditional HOA communities.
 

Q: What happens if the sum of homeowner shares does not match the association's total shares?

A: The system validates that the sum of all homeowner shares matches the Total # of Shares field on the association. If there is a mismatch, you will receive a validation error when attempting to generate 1098 forms. You must correct the discrepancy before proceeding.
 

Q: Can I generate 1098 forms multiple times?

A: Yes, you can regenerate 1098 forms as many times as needed. Generating the file closes the record, so you will need to open the mortgage record to regenerate. Each regeneration creates a new form with the current mortgage balance information.
 

Shares and Calculations

Q: How many decimal places can I use for homeowner shares?

A: The 1098 Shares field supports up to 2 decimal places for precise share allocation.
 

Q: Does Vantaca automatically calculate per-homeowner mortgage amounts?

A: Yes, when you import mortgage balances or enter them manually, Vantaca automatically calculates each homeowner's portion based on their share allocation relative to the association's total shares.



Q: What happens to mortgage records when I update a homeowner's share allocation?

A: When you update homeowner shares, you should regenerate the 1098 forms to ensure the calculations reflect the updated share allocation. The system recalculates all amounts based on the new share percentages.



Ownership Transfers

Q: How does Vantaca handle ownership transfers during the tax year?

A: When you record an ownership transfer with a settlement date, Vantaca automatically prorates the mortgage interest and related amounts. The original homeowner's record updates to reflect amounts through the settlement date, and a new record generates for the new homeowner from the settlement date forward.



Q: Can I manually adjust proration amounts?

A: No, you cannot edit individual homeowner calculations.
 

Q: What happens if I change a settlement date after closing a mortgage record?

A: Closed mortgage records remain frozen and do not update when settlement dates change. If you need to update proration based on a corrected settlement date, you must reopen the mortgage record, which will then update based on the new settlement date.



Import and Data Management

Q: Can I import mortgage balances multiple times during the year?

A: Yes, you can perform the 1098 Mortgage Balance Import multiple times as needed. Each import appends new mortgage records with new balance information.
 

Q: Do mortgage records generate automatically?

A: Yes, when you populate the 1098 Shares field for a homeowner, Vantaca automatically generates a mortgage record for that homeowner. You can then update the balance information through imports or manual entry.
 

Status and Workflow

Q: Can I edit a mortgage record after I generate the 1098 form?

A: Yes, as long as the record status is Open, you can edit the mortgage information. After making changes, refresh the screen to see the updates. You can then regenerate files if needed.



Q: Why does a previously generated XN number disappear from the Reporting tab?

A: When you reopen a closed mortgage record and generate a new 1098 file, the system creates a new transaction number (XN). The previous number is replaced with the newly generated number.



Troubleshooting

Q: The pending counts in the header are not updating. What should I do?

A: Refresh the page to update the header counts. If counts still do not reflect recent changes, verify that your actions completed successfully by checking the individual record statuses.
 

Q: I see a validation error when trying to generate 1098 forms. What could cause this?

A: Common validation errors include:

• Sum of homeowner shares does not match the association's Total # of Shares.
• Missing or invalid homeowner share allocations.
• Missing required tax identification information (SSN or EIN).

Review the error message for specific details and correct the issue before attempting to generate forms again.



Q: What happens when a homeowner's mailing address is different from their property address?

A: When submitting 1098 forms to Nelco, Vantaca handles country code information based on whether the mailing address matches the property address. When addresses match, the country code is included. When the mailing address differs from the property address, Vantaca excludes the country code field to ensure successful submission and prevent validation errors.

 

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