topic TurboTax is asking to put the principal balance if you paid off this loan in 2020. Should I put the amount how much each lender paid when I refinanced? in Get your taxes done using TurboTax

TurboTax is asking to put the principal balance if you paid off this loan in 2020. Should I put the amount how much each lender paid when I refinanced?

daggarwal16 — Wed, 10 Mar 2021 00:44:15 GMT

I have refinanced my home from company A to B last year in April. Then after few months, Company B sold my loan to some company C. Should I say that I have refinanced my home with Company B.
TurboTax is asking to put loan balance as of Jan1, 2021 or the principal balance if you paid off this loan in 2020. I didn't pay off any loan but these different lenders did. Should I put the amount how much each company paid? TT is asking for all three lenders.

Re: TurboTax is asking to put the principal balance if you paid off this loan in 2020. Should I p...

ToddL99 — Wed, 10 Mar 2021 17:00:54 GMT

Did you receive three (3) Form 1098s?

Company A - Enter $1 as ending mortgage principal balance for Company A - you didn't owe them anything at the end of 2020, but the program won't accept "0" as an ending balance (see below).

Company B - The transfer to Company C was not a refinance; it was just a change in who was servicing the loan. Enter $1 as ending mortgage principal balance for Company B - you didn't owe them anything at the end of 2020, but the program won't accept "0" as an ending balance (see below).

Company C - This is the loan you had at the end of the year and should accurately report your year-end mortgage principal balance. Enter that ending mortgage principal balance in Box 2 of the 1098 interview.

If you no longer have a particular mortgage (refinanced or paid off or transferred to a new lender), entering "$1" as the mortgage loan balance will not have any effect on your tax calculation and will not generate an error in either TurboTax or with the IRS,

There are many places in TurboTax where you must make a non-zero entry, primarily to let the program know that you answered the question and that the answer makes some sense.

In this case, entering "$1" tells the program that you didn't forget to answer the question and that you had at least some amount of a mortgage loan balance to justify claiming an interest

Re: TurboTax is asking to put the principal balance if you paid off this loan in 2020. Should I p...

daggarwal16 — Wed, 10 Mar 2021 23:44:38 GMT

I received 3 forms of 1098s. Thank you so much for your detailed response!! It is extremely helpful!