TurboTax appears to sum loan balances reported on 1098's, thus limiting interest deductions.
My situation:
Home "A" sold/closed on 3/31/2025. NOT pre-2017, no refinances, no second mortgage. $490k-ish. One 1098 received for this home.
Home "B" bought/closed from builder on 4/23/2025. Used builder's mortgage company. $665k-ish + $19k points. Builder's mtg co sold loan after 45 days. One 1098 received from builder's mtg co.
Another 1098 received from acquiring servicer on Home "B".
No refinances, no second mtg on "B".
TurboTax has home sale gain/loss on Home "A" calculated in "Income" section.
TT does not have data entry on sale date of "A" in the 1098 section for that lender...only after all 1098's have been entered and TT says interest deduction is being limited.
I've seen several threads of similar circumstances advising:
--to sum all interest & points in TT using placeholder 1098, and weight mortgage balances by # months
--sum interest and points on Home "B"
--override/adjust interest being deducted during EasyStep interview after 1098 entries
--abandon Pub 936 methodology to avoid lumping of mortgages.
Software is downloaded TT Deluxe from Costco. All updates from TT are in place.
Using a recent Mac laptop with most recent operating system.
What is the current advice for proper treatment? Thank you.
