Changing Second Home - Mortgage Interest Deduction

JGH59 — Fri, 10 Jan 2025 17:48:53 GMT

I purchased a second second home in March of 2024. According to IRS pub 936, page 4, second column, only one second home can be claimed at a time. The reg indicates on the same page that I can change the home designation during the year which I interpret as designating the new home as my now second home. I am trying to enter the 1098 for both homes in TurboTax Premier and have the interest for the original second home be deducted for Jan-Mar, and the interest on the new second home be deducted for Apr-Dec. Neither home individually is over the loan limit of $750K and I do not have a mortgage on my primary home. Turbotax is trying to calculate a loan average and adjust the deduction interest using a ratio. The only viable option I can see is to enter one 1098 with a lower interest amount than actually reported to the IRS and make a supporting detail note as to the reason for the reduction. Yet, I still cannot get Turbotax to stop trying to calculated a ratio for allowable interest. I can override amounts but I have a concern about the causing an IRS audit. It would be ideal for TurboTax to support designating a time period for using the interest deduction on a second home. I do consider it a BUG that Turbotax is not complaining about having multiple 1098's entered with the second home designation.

Re: Changing Second Home - Mortgage Interest Deduction

MarilynG1 — Tue, 14 Jan 2025 22:53:43 GMT

When you enter your 1098's for your second homes(s), be sure to indicate that the first loan ended in March 2024, and the second loan started in April 2024, even if that info does not appear on your 1098.

Your mortgage interest should not be limited if your current loan balance doesn't exceed $750K.

You could either Edit or Delete/Re-Enter your 1098's.

Here's more detailed info on the Mortgage Interest Deduction and Tax Tips for Second Home Owners.

This link discusses the Ratio you are seeing for Mortgage Interest on your return.

If you're using TurboTax Online, close the program and clear your Cache and Cookies after editing/deleting.

topic Changing Second Home - Mortgage Interest Deduction in Deductions & credits

Changing Second Home - Mortgage Interest Deduction

Re: Changing Second Home - Mortgage Interest Deduction