Should I leave my mortgage 'Outstanding principle balance blank' if the loan was refinanced or sold to another mortgage company?

Forum|Forum|5 years ago
March 12, 2021
1 reply
16 views

I am on the step of 'Let's wrap up your mortgage interest deduction' and two of my 1098's 'Needs reviews' for the outstanding principle balance. However, these two 1098s were refinanced and then sold.

TurboTax Premier Online

RayW7

Level 12

Entering $0 for Box 2 is allowing people resolve this error in filing their return.

The value of box 2 states the value of the loan as of 01/01/2020. Since the loan started after that there is not a balance for the loan as of that date.

If this loan is a refinance answer the question yes that it is A mortgage loan that I have refinanced.

corycasiniAuthor

Level 2

So I had my original loan which started in 2019 with X company, then in early 2020 I refinanced with Y company, then shortly after that my loan was sold to Z company and I am still at Z company. So are you saying that for X company, I should state I refinanced that loan and then for Y company put '0' in box 2 and then for Z company, put the loan amount as of 1/1/2021?

ToddL99

Level 13

Yes.

For X company, state that you refinanced the loan;
For Y company put "$1" in Box 2 (the program will not accept "$0");
For Z company, in Box 2 enter the loan amount as of 12/31/2020.

Entering $1 in box 2 for Company Y will not have any effect on your tax calculation and will not generate an error in either TurboTax or with the IRS, From an economic perspective, it is accurate - you owed virtually nothing on this mortgage at the end of 2020.

There are many places in TurboTax where you must make a non-zero entry, primarily to let the program know that you answered the question and that the answer makes some sense.

In this case, entering "$1" tells the program that you didn't forget to answer the question and that you had at least some amount of a mortgage loan balance to justify claiming an interest deduction.