I agree with your comments on how Turbo Tax should handle these situations and your reluctance to entering data different from that reported on the 1098. I went into my desktop version of Turbo Tax and traced your steps and entered $59 in Box 1 and $0 in Box 2 of the 1098. I entered $0 when asked for the balance on Dec 31,2023. After selecting the Loan Was Paid Off In 2023 box, I was asked to change the $0 balance entered for Dec 31, 2023 to the balance on the payoff date. I entered $3,000. This worked without making changes to the 1098.
I know you said you have tried this already but if you want to try it again, start with a clean slate by deleting the HELOC mortgage entry that you have been trying different scenarios on and re-entering from scratch.
