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Deductions & credits
You should report the Box 2 - Outstanding mortgage principal as zero for the first two 1098s in your example. This should correct the error and allow the mortgage to be deductible- assuming you have no mortgage on your first home. The $750,000 limitation does include both primary and secondary homes together, not individually.
Here is some more information: Deducting Mortgage Interest FAQs
March 22, 2025
6:50 PM