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Outstanding Balance on Multiple 1098 (Mortgage Interest Statements)
I have already purchased TurboTax for 2019 year from Costco. My original mortgage lender A sold my loan to a new lender B in February 2019. Therefore I have two 1098 statements with two redundant outstanding balances which creates a limitation on interest write-off.
Original lender A:
Interest: $ 2,000 (1 month)
Outstanding Balance: $ 600,000
New lender B
Interest: $ 22,000 (11 months)
Outstanding Balance: $590,000
When filling out the deduction in TurboTax, I entered both 1098 statements, and the combined interest is $24,000 with no issue.
However, I am also required to fill out the outstanding balance for each of the 1098 statements, and the combined outstanding balance is $ 1,190,000. However, the original lender A outstanding balance is $0 as of February after the mortgage is sold to B, and TurboTax does not allow me to enter $0 for A.
TurboTax uses $ 1,190,000 as my mortgage balance, and this limits the allowable interest deduction. The tax code limits the balance to $750,000 or $1,000,000 depending on loan initiation date, or the interest deduction is prorated.
If there a solution to this very common situation?