In 2019, I purchased a new home and subsequently in 2020, I refinance the mortgage on this home to reduce the interest rate. Both mortgages were held by the same lender but I received two separate 1098s.
I am having an issue after entering the two 1098s where it is telling me that the interested deduction needs to be limited. I have tried importing the first 1098 and making any necessary corrections to the original loans 1098. During this import, I indicated that the mortgage was paid of or refinance with a different lender (I assumed that in my case it was paid off and so I should say yes here). Additionally, I select that the loan was refinanced and no cash was taken from the loan in the refinance.
I'm not clear on how I should answer some of these questions. Here's what I entered for the questions regarding the refinance:
- Original Loan
- Was this loan paid off or refinanced with a different lender?
- Is this loan a home equity line of credit or a loan you've ever refinanced?
- Yes, this is a loan I've refinanced or a home equity line of credit (HELOC).
- A mortgage loan that I've refinanced
- No, I have never pulled cash from this loan when refinancing it.
- New Loan
- Was this loan paid off or refinanced with a different lender in 2020?
- Is this loan a home equity line of credit or a loan you've ever refinanced?
- I'm not sure how to answer this one because it's not the original loan but I have not refinanced it.
So, my question is two part.
- Does what I have entered so far make sense for a refinanced mortgage?
- If no, what'd I do wrong? If yes, what do I answer for the new loan as to whether it is an HELOC or if I have ever refinance. I haven't refinanced it but it's also not the original loan that I took out to buy the home.
I think I've missed something here but I can't figure out the right combination for my scenario.
