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Deductions & credits
Since the interest paid on the first 1098 is on a loan that is not on a qualified home you do not enter that 1098 in TurboTax. The 1098 entries are only for qualified home mortgages. You should be sure to enter the second 1098 on your new home to get the itemized deduction for that interest paid.
Additionally, you should enter the sale of the prior home in the "Home Sale" topic in the "Less Common Income" dropdown menu under the "Wages and Income" section. If you owned and lived in the home for at least 24 months prior to the sale you will be able to exclude up to $250,000 gain on the sale (500,000 if owned jointly with your spouse who also lived in the home).
Here is a link to Publication 936 for Home Mortgage Interest
Here is a link to Publication 523 for the Home Sale Exclusion
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