I have a construction loan end in 7/2020. The loan amount at the beginning of 2020 is 540K, only exceed 750k since April.

Beginning balance is 540K. The balance went up to 1 mil in July and I was then paying it down to 800K at the end of 2020.

I put the number from my 1098 form from the bank to Turbotax. Turbotax did ask if the loan balance exceed 750K. I said yes but I didn't do anything.

The outstanding mortgage principle showed in the form is only 540K which is the beginning balance. I think that is why nothing else was asked in Turbotax

How do I deal with this issue? I asked a live Turbotax expert and she doesn't know how to resolve it.

Expert Alumni

Mar 10, 2021 2:02:51 PM

Assuming your original balance was $540K in the beginning of the year and then jumped to $1M in July, your averages balance during the year is $1.54M/2= $770K. Report this in the original 1098-T and leave that box blank if you have more than one 1098-T. Some of the mortgage interest may be reduced because you are over the $750K threshold. Try this and see if this works.

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I have a construction loan end in 7/2020. The loan amount at the beginning of 2020 is 540K, only exceed 750k since April.