My loan was sold to a different mortgage servicer in Nov 2022 so I received two 1098s. First 1098: box 2 outstanding mortgage: $229,000. Second 1098: box 2 outstanding mortgage: $189,000. I read many questions and solutions in TT and they were for previous tax year and 2022 TT asked me more questions. I tried different answers and TT still think that the 2nd 1098 was a home equity line of credit (HELOC) or refinance so I didn’t get deductions for the mortgage interest from the 2nd 1098.
First 1098:
Second 1098:
Q.1 Have you used the money from this loan exclusively on this home?
This applies to the entire lifespan of the loan, and includes improvements or mortgage payments made on the property that secure the loan.
Q.2 Since you’ve used money from this loan for things not related to the property it’s secured by, you can’t deduct ..
Q.3 What is the balance of your loan on 12/31/2022
Q.4 In both 1098 worksheet, TT asked ‘was this loan a result of a refinancing a previous loan’ and gave me errors
Q.5 1st 1098 was a refinance so I still need to spread the points for the next 12 yrs. I hope the 2nd 1098 won’t remove this deduction in 2023
Thank you so much for your help!
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First keep in mind a loan sold to another servicer is the same loan. With that in mind follow these steps to delete all the 1098 entries and start fresh.
This should now show a full deduction including prorated points.
Q.1 Have you used the money from this loan exclusively on this home?
This applies to the entire lifespan of the loan, and includes improvements or mortgage payments made on the property that secure the loan.
Since you are amortizing points that would indicate you answer "Refinance" and "NO" you did not use on something else.
Q.2 Since you’ve used money from this loan for things not related to the property it’s secured by, you can’t deduct
If you answer "NO" to question about use of the loan you will not get this question.
Q.3 What is the balance of your loan on 12/31/2022
If you answer "NO" to question about use of the loan you will not get this question.
Q.4 In both 1098 worksheet, TT asked ‘was this loan a result of a refinancing a previous loan’ and gave me errors
Errors should clear with the above entries.
Q.5 1st 1098 was a refinance so I still need to spread the points for the next 12 yrs. Yes, the loan sold to another servicer will continue to be prorated the same as the original loan.
First keep in mind a loan sold to another servicer is the same loan. With that in mind follow these steps to delete all the 1098 entries and start fresh.
This should now show a full deduction including prorated points.
Q.1 Have you used the money from this loan exclusively on this home?
This applies to the entire lifespan of the loan, and includes improvements or mortgage payments made on the property that secure the loan.
Since you are amortizing points that would indicate you answer "Refinance" and "NO" you did not use on something else.
Q.2 Since you’ve used money from this loan for things not related to the property it’s secured by, you can’t deduct
If you answer "NO" to question about use of the loan you will not get this question.
Q.3 What is the balance of your loan on 12/31/2022
If you answer "NO" to question about use of the loan you will not get this question.
Q.4 In both 1098 worksheet, TT asked ‘was this loan a result of a refinancing a previous loan’ and gave me errors
Errors should clear with the above entries.
Q.5 1st 1098 was a refinance so I still need to spread the points for the next 12 yrs. Yes, the loan sold to another servicer will continue to be prorated the same as the original loan.
Hi DMarkM1,
Your instructions worked! Thank you so much!
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