Under tax law, you're limited on the amount of home interest you can deduct. The limit is based on the loan amount and date of the origination of debt. Since your current home loan was sold, you have 2 mortgage balances on the 1098s between the 2 lenders.
To correct this so you aren't showing loan amounts over the limit you can follow these steps:
- Gather all of your 1098 forms related to your loan that was sold (the form from your original lender and the form from your new lender).
- Grab a calculator and add together the box 1 amount from each form. Enter the total in TurboTax as Box 1 Mortgage interest.
- Add the Box 5 amount from each form and enter the total as Box 5 Mortgage insurance premiums. (If you weren’t required to pay mortgage insurance, these boxes will be blank on your forms and you won’t enter anything.)
- Add the property tax paid from each form and enter it in the Property (real estate) taxes box.
Next, finish adding info for boxes 2, 3, 7, and 11 using Form 1098 for the original lender.
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