I do not know if the recent changes to TT fixed the issue, but I found a method that uses the program as intended and:
- does not involve combing 1098s
- does not involve involved editing in forms mode
- does not involve in changing data that is reported on the 1098s.
I had further complications because I had taken money out over the years for non-house reasons so that partition of the interest should not be deducted.
Here is what I did.
I entered the lenders in chronological order. After every lender, I went into Forms view just to verify I was getting the numbers I expected. The forms I checked were the Ded Home Mort form and the individual lender worksheets.
In my I had 5 1098s. They were:
- The original loan that I started the year with
- My HELOC
- My First Refi of the year
- A bank transfer of my first Refi to another lender. This was not my decision and I did not authorize it. (It is standard practice of the lending industry)
- My 2nd Refi of the year.
Many have said to combine 3 & 4. This is not necessary if you enter the data correctly.
Entering data in #4 is confusing because 3 & 4 have the same origination date. Yes, you should enter the same date for both. The key is that #4 has an acquisition date. That is the date that tells TT when that loan servicing was transferred from #3 to #4.
Another confusion thing was the final balances. If the loan was paid off via refi, the final balance is the principle that was transferred over to the new loan. You think it would be zero, but if you read the TT interview it tells you to put the last payment, which means the principle that was moved over. TT knows how do deal with it, because you should have checked the box that the loan was paid off.
As a point of clarification, the answer to “When did you make your final payment?" It is the origination date of the next loan in the next loan’s box 3.
Finally, a sticking point for me was because I did not use all of the loan proceeds to buy or improve the house (i.e., I have taken money out over the years for other reasons). When it says the loan, it means all the loans combined (the original and all refis). It is an aggregate number.
Let’s say that my previous loan was 400,000, but only 300,000 was used to buy the house or improve it. Then I refi’d and took out 10,000. The amount I would report on the refi loan that I used to buy or improve the house would be 310,000 (not just 10,000). Once again when it says loan it is referring to all previous loans on the house.
Following these methods gave me an accurate tax return without combing or changing data.
Good luck, it took me hours to figure this out, but the key was checking the forms as I went along every step of the way.
