Final principal balance if mortgage is paid off this year

[linma1]

I'm confused by this. My loan was paid off in April 2020. If I use the principal balance at payoff time, the beginning balance and he payoff balance will be used to come up with the average balance. I also have another loan for the whole year (for another property), and the two averages are added up when calculating the overall average mortgage. But this doesn't sound right - For the loan that's paid off, I only had its balance for 4 months, not the whole year like the other one. TurboTax asks for the payoff date, but entering whatever date doesn't seem to change the calculation - it simply adding the beginning and payoff principal and divided by 2. 

If I manually add up each month's mortgage balance and divide by 12, i'll get a very different (more accurate) number. As I mistaking something? Some posts suggested putting 0 as the final principal balance, but that doesn't sound right either. 

[ReneeM7122]

The outstanding mortgage amount in box 2 is the balance as of 1/1/2020 not 12/31/2020.   Since your loan was paid off in April, that could be the issue.

[linma1]

I think you misunderstood my question. I have no issue with Box2, the outstanding balance on 1/1/2020. My question is regarding the final principal balance and the payoff date. It looks like TurboTax is using the final principal balance (in April in my case) to calculate the average mortgage amount for the whole year, which I don't feel is right. Please refer to the screenshot. 

[DaveF1006]

It depends. Here is a link to help you determine if the average mortgage amount is correct as Turbo Tax determines it. Look on page 13, that has a worksheet, that determines your average balance and if it allowing the same amount of interest Turbo Tax is allowing.