If a plan allows loans for the purchase of a principal residence that meets all the requirements for having the interest be tax deductible to the borrower, is the trustee required to issue a 1098 Form for the loan interest paid to the plan for the year?

The instructions to the 1098 form clearly state that the form only needs to be filed by those who are "engaged in a trade or business" and who received the at least $600 of interest during the year.

Is there a requirement for the trustee to file a 1098 form if the loan interest exceeds $600 during a calendar year?

Thanks.

I think you have to look at the specific loan transaction. Generally, plans do not actually take and file a mortgage on the home -- they just require participant to state the loan purpose. If there is not an official recorded mortgage, a 1098 would not be issued (and deduction of interest paid by participant would be at risk). If the loan was structured as a true mortgage, hopefully the plan trustee will issue a 1098 (even though they are not in the loan business).

I'am confused. A person takes a loan from a pension plan, pays himself back plus interest and gets to take a tax deduction because the loan is for a primary residence? I didn't think this was allowed? Can someone enlighten me.

Kip: If you are careful (and plan is cooperative), it is possible. Subject isn't much talked about... Not sure why. Probably best (maybe only) discussion is in PLRs 8935051 & 8933018.