In which situation might a taxpayer need to file a 1098 form?

A taxpayer is required to file a 1098 form when they pay interest on a mortgage. This form is used by lenders to report the amount of mortgage interest a borrower has paid during the tax year, which is pertinent for the taxpayer when calculating potential deductions.

Mortgage interest payments may be deductible, reducing the taxpayer's taxable income. This is especially relevant for homeowners because it can lead to significant tax savings. The 1098 form details the specific amount of interest that qualifies for these deductions, thus enabling taxpayers to accurately report this information on their tax returns.

In contrast, the other situations presented do not apply to the use of a 1098 form. Selling property would typically involve different tax forms, such as a 1099-S for reporting the sale of real estate. Claiming educational credits would generally involve filing forms like the 1098-T, which is used for reporting tuition payments, not the 1098 used for mortgage interest. Lastly, receiving dividend payments would require the use of forms such as the 1099-DIV, which reports dividends and distributions to taxpayers.