The TaxAct program will allow you to e-file up to 20 Seller-Financed Mortgage (SFM) statements. If you have more than 20 SFM statements, you can still complete your tax return in TaxAct, but you will not be able to e-file.

To ensure the correct amounts will be transferred to the main return, total the amounts of each SFM statements into one amount. You will type the "SEE ATTACHED" text into the Issuer name field and enter the consolidated amount.

Next, create an attachment detailing each of the SFM statements as they would be displayed on Federal Schedule B (Form 1040) Interest and Ordinary Dividends, and submit that statement with the rest of the return when you mail it to the IRS. You could provide that detail on a handwritten sheet of paper or use a spreadsheet or document program to create the details.

To enter the interest income from a seller-financed mortgage into the TaxAct program:

1. From within your TaxAct return (Online or Desktop), click Federal (on smaller devices, click in the top left corner of your screen, then click Federal).
2. Click the Investment Income dropdown, then click Interest income from Seller Financed Mortgage(s).
3. Click + Add SFM Statement to create a new copy of the form or click Edit to edit a form already created (desktop program: click Review instead of Edit).
4. On the screen titled Interest Income - Payer's Name, click the data entry field below Payer's name and type "SEE ATTACHED", and leave the Payer's SSN blank.
5. On the screen titled Interest Income - Mortgage Interest, click the data entry field below Mortgage interest and type the total amount.
6. Continue with the interview process to enter your information.

When you print the return, you will see the total interest listed on Line 8a of Federal Form 1040 and, IF the amount entered in total requires Federal Schedule B to print with the return, you will see "SEE ATTACHED" as the description for the name of the payer. You must paper file the return, including your statement of the details.

For more information on installment sales, go to IRS Publication 537 Installment Sales.

Per IRS Publication 523 Selling Your Home, starting page 16:

Report any interest you receive from the buyer. If the buyer is making payments to you over time (as when you provide seller financing), then you must generally report part of each payment as interest on your tax return. Report the interest portion of the payment as ordinary income on Form 1040 or 1040-SR, line 2b, or Schedule NEC (Form 1040-NR) if a nonresident alien. If the buyer is using the property as a first or second home, also report the interest on Schedule B (Form 1040), Interest and Ordinary Dividends, to Form 1040 or 1040-SR and provide the buyer's name, address, and social security number. There is a $50 penalty per requirement for failing to meet any of these requirements.

    If you’re a nonresident or resident alien who doesn’t have and isn’t eligible to get a social security number, you may be issued an individual taxpayer identification number (ITIN). If you don’t have an ITIN, apply for one by filing Form W-7, Application for IRS Individual Taxpayer Identification Number. If needed, a nonresident or resident alien buyer can apply for an ITIN as well.

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the webpage or document at the time it is accessed.