If my home loan was sold to a different lender, what do I enter when asked for the balance of the loan as of 1/1/2019? Zero or the current balance on loan w/ new lender?

[AnnetteB]

If the loan was sold to a new lender, then you would enter $0 as the balance as of 1/1/2019 since the loan in question did not exist on the first day of 2019.

The answer will be different when you are entering the information from the 1098 of the company who bought the home loan.

[Anonymous]

1098 for 2018 would ask loan balance as of 1/1/2018, right?

[ambrizry]

I have same situation but the above advise is incorrect.
You need to enter the balance on loan when the new lender took over the loan.
look at the calculations sheet and you can see for yourself. IF you enter 0 it leaves you with a huge negative number, on line F5 of Home Mortgage interest limitation smart worksheet, just as if you leave it blank; look at sched A line 8 and you will see that interest isn't included meaning you get less of a return.

Based on worksheet you need to enter the balance when loan was sold so it calculates the correct amount of principle payment paid to new lender.

I entered correct number on smart worksheet line and not above where it asks for Box 2 $. This way it matches the 1098 at least.

I am still going to ask the bank to see if I can get a corrected 1098. If not then ill leave it as is because the numbers are right. If they correct it on 1098 then I can enter it in part for box 2 of 1098

[ambrizry]

Here is the inst. from the IRS for form 1098: see for yourselves!(this is for next year)
Box 2. Outstanding Mortgage Principal
Enter the amount of outstanding principal on the mortgage as of January 1, 2019. If you originated the mortgage in 2019, enter the mortgage principal as of the date of origination. If you acquired the mortgage in 2019, enter the outstanding mortgage principal as of the date of acquisition.

[Anonymous]

1098 is changing for 2019. Unfortunately, neither TurboTax nor the other block tax software seems to be handling it correctly for this year.
Our loan was sold on day 1, which means, both 1098s technically have the same amount for loan values. However, when I enter the same value, it just doubles up my loans (as 2) and puts me out of the deductible range.

[ambrizry]

 Did you make a payment to the first lender? They both may have sent you duplicate 1098s. I would go into worksheet and using your lenders statement to determine the amount of principle and interest you paid. This will help determine amounts to be entered and if you need a corrected 1098

[ambrizry]

You should be entering two separate 1098s and not combining them as one. Again try worksheet to see why it is combing totals. Mine treated them right and calculated interest paid

[Anonymous]

Hello ambrizry,
I entered them as two separate items. Lender 1 only has prepaid, interest + tax and some points. Lender 2, who assumed the loan from day2, has rest of all monthly interests. Loan origination amount is the same for both lenders.

[ambrizry]

That prepaid interest should have lowered your starting balance for second lender.  Check first statement and see starting balance and look at first lender if you have any access to them for closing balance.
First lender worksheet should show interest you paid and 0 principal. The end balance should be less the interest paid. Second lender origination amount would be first lenders end balance and the second lender would have end balance based on your last statement after final years payment. Sounds to me like you need a corrected 1098.
Look at info for your current lender and see total principal paid, interest paid, and the year end balance..use those numbers to work backwards to get your starting origination balance for second lender.

[Anonymous]

Hello again,
And sorry for hijacking this thread.
Lender 2's starting principal is the same amount as our total loan amount with lender 1. The loan originated on 2.23.18, so prepaid interest was for the 5 days till the end of the month. That 1098 (lender 1) only has this interest paid and points (which seem to correspond to lender fee on our closing disclosure, not sure if I should enter the points on 1098 then, but I digress).
Second 1098 has interest paid for the rest of the year, but since they assumed the loan on 2.23.18, this date is in #3 as mortgage origination date, #2 outstanding balance on 1/1/18 is blank.
I am forced to leave the one of the 1098's loan amount as 0, to avoid being counted as 2 loans. I might have to call the bank(s) again to bring up the prepaid interest part.

Thank you for helping me through this!

[ughtaxes]

average loan balance on mortgage sold to another lender

[meghashyam-ps]

I entered 0 for the old lender for balance as of 01/01/2019 and the balance for new lender as of 01/01/2018 same as the old lender from old lender's 1098. The federal taxes look fine but this information is being used in CA return and its taking as two loans and summing up the average loan balance from both and using it to calculate my adjusted mortgage interest rate and its coming to a huge negative number . Anyone else faced this issue? How did you fix it? what are you supposed to enter?

[jeijogu]

I have the same problem. I got around it by setting one of the "outstanding principal" values to zero, and adjusting the worksheet, which seemed to fix the calculations for both the $750k limit and the state tax adjustment (both not applicable in my case). Probably Intuit should fix this.

[vuvanle120]

I have the same issue. I was freaking about because I went over the $1M limit deduction. sign. This should be fixed