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Deductions & credits
My "workaround" for now is to create a synthetic 1098 that combines the values. So it has the sum of the interest that I paid on both loans, but a principal amount that's equal to the weighted average principal that I held throughout the year.
I included a note to the IRS explaining the situation.
At the end of the day, the correct amount of the deduction is a function only of 1) total interest paid, and 2) average amount of origination principal. So using this workaround produces the correct amount of tax. I wish that TurboTax could do this correctly on its own though. I feel like if I had access to the source code I could fix it quickly.
‎January 26, 2021
3:39 PM