Deductions & credits

This depends on whether or not you refinanced your loan and received a new loan or you sold your home and purchased a new one. 

if you have refinanced your home, it is normal that you have received two forms 1098, one from each loan.

You'll need to enter both 1098 forms on your tax return. In TurboTax, to enter these forms 1098, please follow these steps:

1. Click on Federal Taxes
2. Click on Deductions & Credits
3. Under All Tax breaks, locate the section Your Home and click on Show more
4. Click Start next to Mortgage Interest, Refinancing, and Insurance (see screenshot 1)
5. Follow the interview and enter your first form 1098
6. Click Continue at the end of the interview
7. You will be brought back to the Mortgage deduction Summary page
8. Click on Add a Lender
9. Follow the interview and enter your second form 1098.

The 1098's should have an Origination Date in Box 3 which should differentiate an Original Loan 1098 from a Refinanced Loan 1098, so the loan balances would not be added together.  When entering your original loan 1098, DON'T indicate 'this loan has been refinanced' (even if it has).

When you enter your Refinanced Loan 1098, indicate YES this loan has been refinanced.  You will then be able to indicate whether the entire loan amount was to 'buy, build or improve' your main home or you took CASH OUT in addition to refinancing the old loan (screenshot).

If on the other hand, you sold one home and purchase a new home you can still deduct home mortgage interest, real estate taxes, points, etc paid on your purchased home. You will also take similar deductions on the original home that was sold. 

The sale of your home is reported only if you have a taxable gain or received Form 1099-S. Please use the steps below to report it; Turbo Tax will determine if you have taxable gain:

1.  Wages and Income, Jump to the Full list

2. Select Less Common Income

3. Select Sale of Home (see screenshot below)

Note: individuals can exclude up to $250,000 ($500,000 if Married filing jointly) of gain on the sale of a home if three provisions are satisfied:

1) Ownership. The individual owned the home for at least two years during the 5-year period ending on the date of sale,

2) Use. The individual used the home as a principal residence for at least two years during the 5-year period ending on the date of sale, and

3)The individual did not exclude gain from the sale of another home during the 2-year period ending on the date of sale.

 See the steps below:

[Edited 02/3/3023 6:31am PST] @djholguin