- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Deductions & credits
The first home should not need to be modified if you carried the mortgage for the entire year. Report the Form 1098 just as it is using the number in Box 2 as the Outstanding Mortgage Principal.
For the second home which you purchased in November, you can use the average mortgage balance to modify the Outstanding Mortage Principal reported in Box 2. If the mortgage origination date is in November 2021, use the amount in box 2 as your outstanding mortgage for November and December. For January through October, your outstanding mortgage was 0. Your average for the year should be:
Outstanding Mortage Principal in Box 2 x
the number of months you had the mortgage / 12.
This is not perfect but it's close and if you only carried it for two months you should not be anywhere near the interest deduction limit. Take the average of all 12 months and report this in Box 2 as the outstanding mortgage principal for your second home.
TurboTax is aware of the Deductible Mortgage Interest Worksheet limitations. You can sign up for notifications here.