@ReneeM7122 My situation, proposed solution and questions:
I had 2 "loans" in 2020 (for which I have interest and points to deduct).
Loan 1 for Home 1 - I sold this home in December of 2020. The loan originated before 2017 and was for less than $1MM. I received 1 1098 from the Bank (we'll call bank A)
Loan 2 for Home 2 - I purchased this home in August 2020. The loan originated in 2020 and was for more than $750k. Adding to the issue, Loan 2 was sold to another bank in 2020, so I received 2 1098s for this loan (from Bank B and C)
Here is the guidance I received on how to solve this from TT Premier desktop
For Loan 2 (that was sold to another lender):
1. Add the Mortgage Interest Received, Mortgage Premiums (if any) and property tax amount from each form and enter the totals for the original lender only in TT.
2. Enter the remaining items from the original lender 1098 loan for the Outstanding Mortgage Principal (Box 2), Mortgage Origination Date (Box 3), and the checkbox on box 7 (address of property securing the mortgage)
For the multiple loans (Loan 1 - before 2017 and less than 1MM and Loan 2 - after 2017 and more than 750k)
Home 1 ($1mm limit)
1. Calculate the average balance - (beginning balance + ending balance)/2
2. Calculate the percentage to deduct -1,000,000/ average balance = 1 (do not go over 1 or 100%)
3. Calculate the deductible amount of Interest - $total interest * 1 (Report on Box 1 on the 1098)
4. Deductible Interest =$18,000 (Enter for Interest on Box 1 on 1098 for new home)
Home 2 ($750,000 limit)
1. Calculate the average balance - (beginning balance + ending balance)/2
2. Calculate the percentage to deduct -750,000/ average balance (do not go over 1 or 100%)
3. Calculate the deductible amount of Interest - $total interest * percentage to deduct (Report on Box 1 on the 1098)
Box 2- Make sure you enter $0 on each 1098.
Total Amount of Interest Deducted on your Tax Return = deductible amount of interest on Home 1 + Home 2
Questions
Do Check the box in TT that asks if the amounts I am entering for box 1 are different than my 1098 (and if so, what do I enter in the subsequent notes?)
What about points, I paid points for Loan 2, do I just enter those for Loan 2 in TT ?
Is there a knowledge base or expert that know about this issue that can weigh in on if the software will eventually be supporting this vs asking users to implement the workarounds above?
