I had two properties in 2023 (a first and second home) - combined, these loans had a principal balance under the $750,000 limit for full mortgage interest deduction. To make the math easy, let's just say the loan amounts were $325,000 and $350,000, for a total of $675,000.
One loan was acquired by another servicer, so I have a total of three 1098s that I've entered into TurboTax. Here's my problem:
When I enter the third 1098 for the acquired loan (let's say the principal on that on that one is $320,000 because it's an acquisition of that first $325,000 loan), TurboTax is now calculating my mortgage interest deduction based on loan amounts of $995,000 ($350,000 + $325,000 + $320,000), when I never had a principal balance over $675,000 at any given time during the year.
If my mortgage had not been acquired, I would have been deducting 100% of my interest on the $675,000 in loans, but because it thinks I had $995,000 in loans, I'm losing a huge percentage of my deductible interest.
Any ideas how to fix this issue?
