topic Re: 1098 question in Deductions & credits

If my mortgage company sold my loan to another lender is that considered a new mortgage?

silvi2007 — Thu, 06 Jun 2019 15:11:01 GMT

Hi what do we do about the loan balance question for the...

janesritual — Thu, 06 Jun 2019 15:11:03 GMT

Hi what do we do about the loan balance question for the 2nd 1098?

No. It's the same mortgage for tax purposes. You should b...

MichaelDC — Thu, 06 Jun 2019 15:11:05 GMT

No. It's the same mortgage for tax purposes. You should be getting two separate 1098 forms soon from both mortgage companies.

If, by chance, it was a refinance with points paid on the refi, those points would have to be spread out over the life of the loan.

The Turbo Tax software does not seem to match this answer...

mittelstaedt-1 — Thu, 06 Jun 2019 15:11:06 GMT

The Turbo Tax software does not seem to match this answer exactly. The 1098 for the purchased loan (new lender) has the original loan date but has a zero balance in box 2 for the loan balance at 1/1/18. If I enter zero, the software tells me that I need a balance for 1/1/18. I can enter the balance at 1/1/18 for the original (sold loan), but I also have this amount for the original loan 1098. I can make the program work, but workaround does not seem accurate. It overstates the actual amount of debt I have at 1/1/18.

Hi, I am having the same situation. What do I do for the...

janesritual — Thu, 06 Jun 2019 15:11:08 GMT

Hi, I am having the same situation. What do I do for the balances question for the 2nd 1098

I have the same issue. How can both 1098 forms be entere...

donalfo — Thu, 06 Jun 2019 15:11:09 GMT

I have the same issue. How can both 1098 forms be entered without losing the links to points and not having the tax form indicate 2 mortgages? Really need to finish my taxes so an answer is important.

My resolution: Put "ending balance" for loan 1(seller of...

squartucci — Thu, 06 Jun 2019 15:11:11 GMT

My resolution:
Put "ending balance" for loan 1(seller of loan) as zero (0) for 2018.
Put balance for loan 2 (buyer of Mortgage ) as principal balance. (Value is required even though 1098 , box 2 is empty)
Loan Origination dates were the same for both lenders. (This indicates it is a grandfathered loan and not originated in 2018)

My resolution: Put "ending balance" for loan 1(seller of...

squartucci — Thu, 06 Jun 2019 15:11:13 GMT

I pulled cash from refinance. do I put that on loan 1 or...

auntietuan — Thu, 06 Jun 2019 15:11:14 GMT

I pulled cash from refinance. do I put that on loan 1 or loan 2 the buyer

WOW - This is a case the software does NOT lead you throu...

jobo440 — Thu, 06 Jun 2019 15:11:16 GMT

WOW - This is a case the software does NOT lead you through nicely. The flow starts as if what matters is the 1098 form, which you would have 2 of if your mortgage was sold. But then if you continue through the flow it treats them as two different mortgages and counts points twice etc.

I'm going to report both 1098s and leave everything blank past what is actually on the 1098 for my 2nd lender.

Re: WOW - This is a case the software does NOT lead you throu...

paulofoakland — Mon, 10 Feb 2020 23:15:49 GMT

This seems like a good approach/hack. I'm puzzling through this for 2019 tax year. the process has not improved.... Not clear which 1089 gets the figures put on it regarding pulling money out in refi process.

Re: WOW - This is a case the software does NOT lead you throu...

caliguian — Sun, 23 Feb 2020 18:00:13 GMT

I'm having the same dilemma. The flow for this makes no sense in Turbotax. I've been stuck on this section for about 3 hours with no apparent solution, othering than paying $80 to talk to a live accountant through TurboTax's service. It's really really irritating.

Re: WOW - This is a case the software does NOT lead you throu...

VictoriaD75 — Fri, 28 Feb 2020 02:52:00 GMT

When your loan is sold during the year, you should receive two Forms 1098. One should be from the lender who owned the loan on January 1, 2019 and then sold it. And the other should be from the lender who bought the loan and held it on December 31, 2019.

When your mortgage is transferred to a new financial institution for servicing this is not a refinancing of your mortgage. Your beginning Outstanding Mortgage Box 2 and Mortgage origination date Box 3 do not change when the servicing of your mortgage is transferred to another financial institution.

Follow these steps to add mortgage interest deduction:

Under the Federal menu, choose Deductions & Credits
Expand the menu for Your Home
Click Start/Revisit next to Mortgage Interest and Refinancing (Form 1098)
Enter the information on the screens that follow
When you have completed the first Form 1098 click Add another 1098
When you have added the last 1098 click on Done

Re: WOW - This is a case the software does NOT lead you throu...

cmpsax — Sat, 28 Mar 2020 20:52:05 GMT

@VictoriaD75 - Thanks for the walk-through of steps.

My problem is that I don't see the "Add another 1098" button. I just see "Add Another Lender" - and I believe that matches most folks' experience.

Your point about box 2 and 3 not changing on the 1098 - I think I get it but I'm not sure.

Can you explain how I can verify that the mortgage is being treated as the same mortgage in TurboTax - maybe which form in the Form View?

Asking this question as I'm in the "Fix your errors" section in the review. Form 1098 (I have 4) is first one the list of course.

-Adam

1098 question

jelpmac — Tue, 31 Mar 2020 05:06:00 GMT

My mortgage was sold to another loan company on Dec 3 2019 and they sent a 1098 for 1/2 the State Property taxes they paid. The new loan company also paid 1/2 of my State property tax but did not send a 1098. They did send me an email showing the State taxes they paid in December 2019. How do I do the 2nd 1098?

Re: 1098 question

Anonymous — Tue, 31 Mar 2020 06:00:05 GMT

most like the payment you made after the loan was sold was in January 2020 so there is no interest deduction

so you don't need a 1098

save yourself a headache.

your choice to do 1 of following:

to the 1098 you are entering enter add the second half of the RE taxes. this is for tax return purposes only and will not cause problems with IRS

don't enter any of the real estate taxes through the 1098. total them and enter in the itemized deduction worksheet

Re: WOW - This is a case the software does NOT lead you throu...

stevebor1 — Wed, 15 Apr 2020 22:51:32 GMT

What about Points, Box 7 on the new lender? Still very confused on the steps to take when adding 2 lenders when a loan get bought out in the same year. Please help with steps.

This is what I have. Original Lender, then the New Lender that purchased the loan.

Original Lender 1:

Box 1: $$

Box 2: $$

Box 3: 03/15/2019

Box 6: Points $$

Box 7: X

New Purchasing Lender

Box 1: $$

Box 2: $$

Box 3: 03/04/2019

Box 8: Home Address
Box 9: 1

Box 10: $$
Box 11: 5/16/2019

Re: WOW - This is a case the software does NOT lead you throu...

AmyC — Thu, 16 Apr 2020 23:16:46 GMT

For your situation:

Original Lender 1

enter name, continue,
none, continue,
enter boxes 1,2,3,7 , continue.
this is a new loan, I paid points, continue,
loan start date, length, points paid AND loan was check the box for loan PAID OFF or REFINANCED in 2019, continue
yes original loan, continue,
congrats tax break, continue

New Lender -

enter name, continue,
none, continue,
boxes 1,2,3,11 enter information, continue,
no points for this loan, continue,
yes this is the original loan,
continue, congrats

@stevebor1

Re: WOW - This is a case the software does NOT lead you throu...

benster310 — Wed, 22 Apr 2020 02:46:40 GMT

<<Your beginning Outstanding Mortgage Box 2 and Mortgage origination date Box 3 do not change when the servicing of your mortgage is transferred to another financial institution. >>

Hi Victoria, according to the IRS instructions, box 2 *should* be different.

https://www.irs.gov/pub/irs-prior/i1098--2019.pdf

Box 2. .... .... If you acquired the mortgage in 2019, enter the outstanding mortgage principal as of the date of acquisition.

Also, there is no option to "Add another 1098", only to add another lender.

Re: WOW - This is a case the software does NOT lead you throu...

stevebor1 — Sat, 25 Apr 2020 18:08:57 GMT

Thanks, I was going back and forth on this. Every time I visited this section, my Federal Refund would constantly fluctuate. By following your instructions, I went from -300 to +750 on my refund. Thanks again!