If you have to also file California income tax (540), the only way to get the right deductions for both federal & state is to combine the two 1098s into one entry in TurboTax, because it is only one loan, but with two different servicers at the beginning and at the end of the year. For the lender name, I used "Lender 1 + Lender 2", for box 1: the sum of the two 1098s, box 2: from lender 1, box 3: the same date on either 1098, and box 11: from lender 2. This way, the calculation by TT on the 540 Deductible Home Interest Worksheet will be accurate and the entry in the 540 California Adjustments - Residents Part II, 8a, will be correct.
