Form 1098 and confusing message "Beginning principal must be entered"

Forum|Forum|6 years ago
March 9, 2020
2 replies
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I received this 1098 form from my bank for the Home Equity Line Of Credit:

End entered the data in the TurboTax form when it was asking about it:

Towards the end Turbotax asked me to make this correction

Where do I get the value for the "Beginning balance" taking into account it doesn't exist in 1098?

Best answer by ThomasM125

You are correct, you are dealing with what you actually owe, not the amount you can borrow. So, the beginning balance is what you owed to start out with and the ending balance is what you owe at end of year.

Irene2805

Level 15

Enter the original amount of the Home Equity Line of Credit (HELOC) when you applied for the loan. You are correct that it does not appear on the 1098, but I'm sure you have that figure in your loan documents.

lighter1Author

Level 3

Thank you for the response Irene, can you please double check it? I'm not sure that advice is correct because, from the definition of Loan Balance or Principal Balance that is basically "... the remaining amount you have left to pay on your loan ...". So, if I would do what you suggest I would specify there the amount available to me on that credit line which is not the amount I have left to pay on my loan.

ThomasM125Answer

Level 15

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ReginaM

Level 12

It looks like that there may have been an error in inputting your 1098 into TurboTax. If you took no cash out when your refinanced your home, you should not get the second series of questions. You may want to delete your 1098 and re-input it into TurboTax.

The second set of questions is to help you figure out what amount of interest you are eligible to take if you used part of your refinance funds for something other than your principal residence.

If you did refinance your home and use the funds for something other than your residence, then you will need to answer the second section of questions. On this screen, TurboTax is asking about your original loan amount as it will compute your tax deductible interest.

I hope this helps!

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