@Cynthiad66 @andrewnagel
Dear Cynthia,
Thanks for your reply. If you see several of the other threads about this issue, the solution has come up a few times. However, while this may suppress the error it is not ideal for several reasons. Chief among these is that the IRS actually requires you to calculate and report the average mortgage balance held over the year in such cases. A large number of refinances do not simply carry over the prior balance onto the new mortgage, either because additional payments are made or because closing costs are built-in, or because cash is taken out. In such cases, the mortgage balance depicted on the first 1098 is not the same as the average mortgage balance held over the course of the year. Now, this may be a moot point as long as individual is well below the deductibility limit. However, if close to the limit, erroneously just ignoring one of the two mortgage balances on the 1098 will cause an incorrect value to be entered.
My point in all this is simply to say that these workarounds are not ideal, and have the potential to cause less sophisticated users to make errors with significant long-term consequences were they to be audited (or to leave deductions on the table). The reason we all use software to do this is because it is trivial for code to calculate the above data accurately and fill it in. I think it is indefensible for TurboTax employees to be suggesting that users intentionally misreport their 1098 data to the program to suppress an algorithm error. I realize that in the majority of cases this kind of sloppiness may not have practical consequences, but that is no reason not to do it correctly.
