UPDATE 2021
It looks like This may have been fixed like today 2/5/2021 or yesterday, update your software. I will post an image in a new reply.
There is definitely an issue with this and the CA 540 form. Selecting the override checkbox "fixes" the final result but it not does actually fix the information within the worksheets.
I had an HELOC and 1st mortgage that I consolidated into a new refi. I am under 750k. But within the CA 540 Ded Hom Mort breakdown as well as the Federal 1040, I noticed that it is not properly calculating the "Average Balance" for each loan. As well as my totally incorrect total loan balance in the CA540 mort ded worksheet part 2 line 2. Just like others have.
The reason the amounts are not calculating properly is because the software is missing two important things to calculate the averages. 1) It needs to know the ending principle that was paid off for each loan. 2) It needs to know the date in which the loan was paid off. Assuming you have loans that were paid off.
It needs this information to find the average over the months the loans were being paid. But then it needs to weight that average over all 12 months of the year.
To make it more complicated, if you changed your balance (say you added to your HELOC) you would need to break down the interval even more to account for the months in which it increased.
These methods of calculating the averages are detailed in IRS form 936. But they are really not discussed on TurboTax.
These things are not listed in a 1098. And they are also not asked of you anywhere within the software. You would have to pull them from statements.
I'm coming closer to just overriding the worksheet values since it does not affect the end result and I am under the cutoff. You should not have to leave out (consolidate 1098s). I don't think that would be a good idea.
