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Is it legal to combine three 1098's into one? Does IRS allow this? Also, what should I enter as the Outstanding Mortgage Principal (box 2)? Average of three? The instructions you referenced states: 

Next, finish adding info for boxes 2, 3, 7, and 11 using Form 1098 for the original loan.

How can I do this if box 2 is the principal, box 3 is the refinance date?