Senario 1:

Customer has construction spec loan in their own personal name (ie John Doe)and thier own TIN but have the checks for the draws payable to the business name (ie Lake Homes). We do not know the reporting structure of the business ma,e. Customer claims they should not recieve 1099 MISC for these draws...your opinions?

Senario 2:

Customer has construction spec loan in the business name (ie Houses llc) but they use their own personal TIN, and the checks for the draws payable to the business....do they get a 1099 MISC...your opinions?

Is the customer doing the draws and making the payments or is the bank? If the customer is making the draws and payments, the bank has no reporting responsibilities.

These are construction loans, so the customer in each scenario submits a draw request to us for the last stage of work they have completed...upon inspection, we lease the funds to them in the form of a check.