Good morning, going through the list.
For the original loan:
- Yes
- Yes
- Yes
- Yes
- I don't actually see anything on the 1098 describing it as "paid off", and nothing near where the points are. Below the points is box 7, where it's checked to say the loan was secured by the the same property as my address. I'm also not sure where I would indicate this in turbo tax... would I select the check box below where I entered the Points dollar amount, the checkbox that says "This loan was paid off or refinanced with a different lender in 2022"?
- Ok, I edited the selection on this loan to say it's the most recent.
- Yes
- Yes
New Loan:
- Yes, although I'll note, the 1098 didn't have box 7 checked. Instead it listed the address of the property in box 8. In turbo tax, I left box 7 unchecked, and on the following screen I selected "Yes, this loan is secured by a property of mine."
- Yes
- Yes, no points entered into turbotax for this loan, and none listed on the 1098
- Yes, selected as most recent
- Yes
- Yes
- One other thing I'll note, the mortgage acquisition date was empty on the 1098. I called the lender to get the actual date, and entered it.
One thing that it did after I entered all of this was ask me to enter the purchase date of the home. Asked twice, once for each lender. For the new loan, I'm not sure if I should enter this as the date the original loan closed, or as the acquisition date that the new lender acquired the loan.
It then asked "we need a bit more information to wrap up this deduction", and asked the outstanding loan balance as of 1/1/2023 for both loans, and the date when last payment was made for the loan that was "paid off". I entered a final payment date and a "0" outstanding balance for the original loan, and entered the balance as of my final statement for the year for the new loan.
It then takes me to a new screen saying "your mortgage interest is being limited" and advises a review of IRS Pub 936. On the "help me with this" link, I read "After December 15, 2017 - You can deduct the mortgage interest you paid on up to $750,000 in loans for your first or second home". I think I should be good by this standard. I do have a second home which I haven't entered yet. However, the loan for the first and second home, combined, is still below the $750,000. So not sure why this screen is coming up, or what I should do here. I'm guessing it may be seeing the "original" and "new" loan as separate loans with a combined amount that exceeds $750,000. Despite saying it's limited, the dollar amount that it says it has under "our calculations" for 1098 interest is the sum of the interest paid on the original and new loan and the points.
