How do I properly enter "outstanding mortgage principal" (as opposed to mortgage interest) while splitting my 1098 for a partial-year home office deduction?

[pher]

I have a single loan / single 1098 for which I paid the mortgage the entire year. I also had a home office for only the last few months of year.

When doing the home office deduction within the Wages & Income section, I needed to enter my mortgage interest. Under the hyperlink "How do I enter my mortgage interest if the time I used the office and the time I paid mortgage interest are not the same?", TurboTax specifically instructs to click "Add another Lender" and break it into two entries: One for the months I had the home office (and selecting that to be included in the home office deduction), and another for the months I did NOT have a home office (and NOT selecting that to be included in the home office deduction).

Splitting the mortgage interest into the two entries was clear (just make it proportional to the number of months I was using / not using the office). But now I am looking at "Box 2 - Outstanding mortgage principal" and I'm unclear whether I should split that as well, or put the total principal of the loan in both. I am worried about double-counting my principal if it's part of a later 1098 deduction calculation -- but if it's not part of a calculation and is just something that gets listed on a reported form, I'm worried about misrepresenting the principal (for example, I don't know if each individual "loan" will be listed separately in the tax filing).

[RobertB4444]

The loan principal is used only for calculation of your allowed deduction.  Since you only have one mortgage loan it will not make any real difference how you handle it but I would go ahead and split it exactly as you did the mortgage interest.

@pher 

[sajobro]

I have a similar situation. Using the add another lender as described in TT, I entered the one 1098 mortgage interest statement as two entries - one for personal and one for the months corresponding to the business. I entered the outstanding principle under the personal entry and for the business entry I didn't select "My form has info in box 2, 3, 7."

When I finished my federal return data entry and when through the checking process, TT required that I fill in the outstanding principle balance on the entry for the business interest. When I applied the same outstanding principle balance, TT recalculated my refund into me owing taxes.

I therefore, went back to both mortgage interest entries and split the outstanding principle balance based on the same percentage as I used for the mortgage interest. This resulted in no change in the TT refund that I was expecting.

Of note, others seem to be having issues with this too. I also noticed that the rounding for mortgage entries doesn't round correctly.