@rcgrosso1 wrote:
Turbotax takes multiple 1098s and and treats them as separate loans, increasing the loan amount and creating a calculation error. This has been know to Intuit for years. Why is this not fixed? Unacceptable.
A good point. I think the way the flow should work, is when they ask if you if the old loan was paid off, it should then ask you if it was refinanced, if you say "yes", it should ask you to enter the details of the new loan and do the math accordingly. I'll call out again, you can't blindly treat the loans as unrelated if the sum of your original mortgage(s) exceeded $750k and originated on or before Dec. 15th 2017, as the TCJA of 2017 page 33, section 11043, sub-section a (i), paragraph II & III state:
‘‘(II) LIMITATION ON ACQUISITION INDEBTED- NESS.—Subparagraph (B)(ii) shall be applied by substituting ‘$750,000 ($375,000’ for ‘$1,000,000 ($500,000’.
‘‘(III) TREATMENT OF INDEBTEDNESS INCURRED ON OR BEFORE DECEMBER 15, 2017.—Subclause (II) shall not apply to any indebtedness incurred on or before December 15, 2017, and, in applying such subclause to any indebtedness incurred after such date, the limitation under such subclause shall be reduced (but not below zero) by the amount of any indebtedness incurred on or before December 15, 2017, which is treated as acquisition indebtedness for purposes of this subsection for the taxable year.
Meaning to handle this grandfathering correctly, you need to carry forward the origination date of the original loan in such cases to ensure this clause takes effect, as well as retaining documentation until the balance of your mortgage (or mortgages) falls below $750k.
So if you have loans totaling more than $750k which originated on or before Dec. 15th, 2017, do be sure you keep this in mind, so you aren't short changed.
