1098 Form Box 2 Blank

[Mcicale]

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! 

[DavidS127]

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".

[Mhalblom]

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)?

[RobertG]

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

@Mhalblom

[Mcicale]

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

[DMarkM1]

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

[Mhalblom]

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-le...

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.

[LeonardS]

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.

[Mhalblom]

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?

[5haughtons]

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. 

[DianeC958]

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

[jlip]

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?

[DaveF1006]

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."

[gwen29]

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

[DianeC958]

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