My wife & I currently live in a house that we purchased on 5/28/2021. Prior to that we lived in our condo that was purchased on 4/18/2019. We sold the condo on 8/10/2021, so for a period of about 2.5 months we had 2 homes and 2 mortgages. The house is our primary residence from 5/28/2021.
We received 3 1098s for 2021. 1) Mr Cooper for the condo with an outstanding principal although the loan was paid off at closing. 2) Freedom Bank which was the original lender for the house purchase. They transferred the loan to US Bank on 7/1/2021. Freedom Banks 1098 also lists an outstanding mortgage principal. 3) US Bank, with our current outstanding mortgage principal.
Q's:
1. When I enter the box 2 info from Mr Cooper's 1098 into Turbo Tax, I owe Fed taxes. If I enter $0 (loan was paid at closing), I do not owe taxes. How do I account for the loan payoff while box 2 still lists the principal?
2. Do I list the condo as a secondary home since there was an overlap of 2 homes?
3. What do I enter in the mortgage interest deduction section for Freedom Bank? The Turbo Tax line states:"Enter your loan balance as of Jan 1, 2022 or the final principal balance if you paid off this loan in 2021". I did not pay off my loan, it was transferred on 7/1/2021. Do I enter my principal balance with US Bank as of Jan 1 2022 in this section since that is my existing loan despite also entering that amount for US Bank in the mortgage interest deduction section.
Appreciate any guidance. Thank you!
