In this case Person 1 had a house, but moved out of it during 2021 and bought a house with Person 2. The mortgage for the current house is greater than the Home Acquisition Debt Limit of $750,000. Person 2 is designated as Head of Household, Person 1 is designated as Single. They split the cost of repaying the mortgage. Since they are filing separately, the 1098 box 1 (mortgage interest) can be split between the two unmarried owners. Can / should the 1098 box 2 (outstanding mortgage principal) be split as well? Does the Married Filing Separately limit of $375,000 apply in this case as well? If so, how is that identified in TurboTax?
Can / should the 1098 box 2 (outstanding mortgage principal) be split as well? Yes, if you are splitting the interest, you would split the outstanding mortgage principal.
Does the Married Filing Separately limit of $375,000 apply in this case as well? Are you married or just living together? If you are married, then yes. If you are not married, then that does not apply to you.
Can / should the 1098 box 2 (outstanding mortgage principal) be split as well? Yes, if you are splitting the interest, you would split the outstanding mortgage principal.
Does the Married Filing Separately limit of $375,000 apply in this case as well? Are you married or just living together? If you are married, then yes. If you are not married, then that does not apply to you.