topic 1098 Form Box 2 Blank in Deductions & credits

1098 Form Box 2 Blank

Mcicale — Mon, 10 Feb 2020 02:39:07 GMT

Hi everyone.

We have 3 1098 forms. We sold our home in May of 2019 but closed on our new home in April of 2019.

Our initial home loan was sold to another company 2 weeks after we closed. Looking at the initial 1098 for the new home, box 2 (outstanding mortgage principal) is blank. TT is telling me it needs a value. Can I put a $0 in the box? I just don’t want to make a mistake.

Thank you!

Re: 1098 Form Box 2 Blank

DavidS127 — Mon, 10 Feb 2020 18:18:43 GMT

If TurboTax is asking for a value, the value is $0.

The box 2 for your new home purchase should be blank, because there was no balance on this loan as of 1/1/2019. You should leave that box 2 blank in TurboTax (per Learn More link) and be sure to enter the mortgage origination date in box 3.

For the second loan on your new house, it should also be blank, and also enter the mortgage origination date in box 3.

Note that when another company buys your mortgage it is not a refinance. So for both the first and second 1098 on the new home, you want to choose answers "No" (Was this loan paid off or refinanced with a different lender in 2019" and "No, this is the original loan I used to buy or build my home".

Re: 1098 Form Box 2 Blank

Mhalblom — Tue, 11 Feb 2020 15:53:26 GMT

It does not allow us to leave the box blank. So we put "0" for outstanding mortgage of the first 1098 form (with the first lender before the loan would have been sold)?

Re: 1098 Form Box 2 Blank

RobertG — Tue, 11 Feb 2020 18:28:07 GMT

Yes, because if the loan originated in 2019 there was no balance on this loan as of 1/1/2019.

@Mhalblom

Re: 1098 Form Box 2 Blank

Mcicale — Tue, 11 Feb 2020 18:31:34 GMT

Our other 1098 for the new house has the balance listed in box 2. Which is why I can confused.

Re: 1098 Form Box 2 Blank

DMarkM1 — Tue, 11 Feb 2020 18:40:27 GMT

If there is an amount listed in box 2 of your 1098 enter it into TurboTax; if not, enter "0".

Re: 1098 Form Box 2 Blank

Mhalblom — Tue, 11 Feb 2020 19:32:36 GMT

There are two different answers to the questions we are asking -

https://ttlc.intuit.com/community/taxes/discussion/my-form-1098-box2-is-blank-and-system-will-not-let-me-move-forward-with-0-error-message-outstanding/00/231842

KrisD15 is saying If this is a new loan and the Lender left box 2 blank, enter the amount of the loan on the first day in 2019 when you acquired it.

So this is confusing when one person is saying to enter "0" and another person is saying to enter our original loan amount.

Re: 1098 Form Box 2 Blank

LeonardS — Tue, 11 Feb 2020 21:30:53 GMT

You will enter your 3 Forms 1098 as follows:

Form 1098 for the home you sold you will enter the balance as of 01/01/2019 in Box 2 and Box 3 is the origination date of the mortgage of the home you sold. When you are asked if the load was paid off or refinanced answer yes. Follow the screen prompts until you are asked if you have another Form 1098 to add select Add Form 1098.

For your new home, 2nd Form 1098, answer the questions as they relate to the mortgage for your new home. Box 2 will have a balance of 0, and box 3 is the origination date of the mortgage. When asked if the loan was paid off or refinanced answer no. Follow the screen prompts until you are asked if you have another Form 1098 to add select Add 1098.

Enter your 3rd Form 1098 using the same information used in the 2nd Form 1098, Box 2 will show 0 balance and box 3 will have the mortgage origination date for your new home. Again when asked if the loan was paid off or refinanced answer no. Follow the screen prompts until you have completed the input.

Re: 1098 Form Box 2 Blank

Mhalblom — Wed, 12 Feb 2020 16:20:28 GMT

So even if our 3rd 1098 form has the outstanding mortgage principal listed, you're telling us to enter "0" instead of the amount we see in box 2?

Re: 1098 Form Box 2 Blank

5haughtons — Sun, 16 Feb 2020 01:28:57 GMT

I have the same question regarding blank Box 2 on 1098.
My 1098 is for an Equity Line loan.
TT will not accept me entering 0 for Box 2.
I wonder how much work this is worth, since the interest amount is very small--$7.54.

Re: 1098 Form Box 2 Blank

DianeC958 — Sun, 16 Feb 2020 18:08:15 GMT

You can put $1 in for the beginning balance and then move forward so you can deduct the interest on the loan.

Re: 1098 Form Box 2 Blank

jlip — Sun, 15 Mar 2020 19:36:29 GMT

When I leave box 2 blank Turbotax gives me the error "Outstanding mortgage principal must have a value"

I tried entering 0 and I get the same error

This is a corrected 1098, we sold our property.

What should I do?

Re: 1098 Form Box 2 Blank

DaveF1006 — Sun, 15 Mar 2020 21:18:12 GMT

Please review this Turbo Tax link that addresses this issue. According to the article:

If this is a new loan and the Lender left box 2 blank, enter the amount of the loan on the first day in 2019 when you acquired it.

The IRS has changed the 1098 this year and looks like it might change again for 2020.

For tax year 2019, Box 2 reports the loan balance as of 01-01-2019 HOWEVER if this is a new loan, enter the beginning balance of the loan.

According to the IRS:

"Enter the amount of outstanding principal on the mortgage as of January 1, 2019. If you originated the mortgage in 2019, enter the mortgage principal as of the date of origination. If you acquired the mortgage in 2019, enter the outstanding mortgage principal as of the date of acquisition."

Re: 1098 Form Box 2 Blank

gwen29 — Fri, 03 Apr 2020 22:09:49 GMT

I have a 1098 form which lists mortgage interest. Box 2 outstanding mortgage is $0.00. This is a time share property mortgage and was paid off / transferred to a different timeshare mortgage. I have input the info. from that 1098 form. My turbo tax program will not allow me to proceed. The message is must have amount input. It will not accept 0.00

Re: 1098 Form Box 2 Blank

DianeC958 — Sat, 04 Apr 2020 12:22:57 GMT

If you put $1 in Box 2 you can proceed and it will not have any effect on your taxes. The program is trying to make sure that you are not deducting interest on loan amounts above $750,000.

@gwen29

Re: 1098 Form Box 2 Blank

mambata1200 — Thu, 18 Feb 2021 01:57:30 GMT

I have a1098 form ( Mortgage interest -for Home equity line of credit with a zero in box 2 (-Outstanding principal balance. ) When I key in zero in Turbo tax , Turbo wont accept a "0". I called my bank , thought my 1098 form is wrong... and they said in the beginning of the year as of 01/01/2020 the principal balance is zero which they reported in IRS.

If I enter zero in Turbo , I cannot move forward and the message says I have enter a figure not zero.

Please advise, how to mitigate this and move forward in processing my 2020 Income tax.

Thank you.

Re: 1098 Form Box 2 Blank

Cynthiad66 — Fri, 19 Feb 2021 01:57:04 GMT

Please try this:

Per IRS Form 1098-Mortgage, instructions for Box 2:

Shows the outstanding principal on the mortgage as of January 1, 2020.
If the mortgage originated in 2020, use the mortgage principal as of the date of origination.
If the recipient/lender acquired the loan in 2020, use the mortgage principal as of the date of acquisition.

Re: 1098 Form Box 2 Blank

TANFENG — Fri, 23 Apr 2021 16:54:10 GMT

I HAVE THE SAME PROBLEM, DOESN'T ALLOW LEAVE BLANK AND "0".

Re: 1098 Form Box 2 Blank

ToddL99 — Sun, 25 Apr 2021 03:21:42 GMT

Enter "$1" as the "outstanding mortgage principal" amount (Box 2, Form 1098 Mortgage Interest). This will not have any effect on your tax calculation and will not generate an error in either TurboTax or with the IRS, From an economic perspective, it is accurate - you owed virtually nothing on this mortgage at the end of 2020.

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 deduction.

See What do I do if I have multiple 1098s from refinancing my home debt? for additional detail on this issue.

@TANFENG