How to handle multiple 1098s from different sources?

[ek123]

Hi, I have the following situation which resulted in 4 1098s for 2022. I have no idea how to file this in TurboTax 2022 in order to maximize my interest deductions. 

1. Heloc obtained in November 2020 against home 1 used to fund purchase of land for home 2.

2. Construction loan obtained in February 2021 for home 2.

3. Home 1 sold and heloc paid off March 2022.

4. Construction loan converted into permanent mortgage March 2022.

5.  Permanent loan sold to another lender March 2022.

This resulted in 4 1098s (HELOC bank, construction loan bank, permanent mortgage loan conversion bank, current mortgage bank). Any thoughts? 

[Cynthiad66]

If you have multiple 1098 mortgage forms from refinancing or your lender selling the loan, you’ll enter them one at a time.

After going through the steps with the first one, you can add a lender when you get to the Mortgage deduction summary screen.

But, if they're both from the same lender, and one of them has the “Corrected” checkbox marked at the top, enter the corrected 1098 and discard or shred the other one.

For a refinance

For a loan that was sold

What if I paid points?

Home equity loan interest

If you take out a home equity loan, your interest payments may qualify for a deduction in addition to your mortgage interest. Beginning in 2018, only the amount that is used to buy, build, or improve your home qualifies for the interest deduction.

This link provides additional information about Home Interest Deductions

[ek123]

I know how to enter multiple 1098s but it appears TurboTax is not recognizing them as being related. I've seen this response before in a similar issue and it does not fully address the issue. 

[Cynthiad66]

Your HELOC may be an issue because, of tax law changes.  The loan or line of credit must be used to buy, build, or substantially improve your home. This requirement began with tax year 2018 and extends through 2025.

You can only deduct the portion of the loan or line of credit you used to buy, build, or substantially improve the home that is used to secure the loan or line of credit. This requirement began with tax year 2018 and extends through 2025. If you’ve ever used part of this loan to pay for things other than this home, you cannot deduct the interest from that amount of the loan, even if the transaction didn’t take place this year

Also, on a sold loan, it matters the order that you enter the forms.  Always enter the original (sold) loan first then enter form 1098 for the new loan.  Same thing for a refinance.

If none of the above helps, please provide more information on what is the issue.  Are you receiving a deduction for the total amounts of the form 1098s?  What is not correct?  What is the difference in the total interest on the forms 1098s and the amount shown in TurboTax?

[ek123]

One thing I tried is entering the three related loans' interests (construction, construction to perm refinance , and sold loan) as one 1098, but that results in different deductions if I try to enter them chronologically one by one. Inevitably when I enter the 1098s one by one and go to form view there is a TurboTax recognized error as a required checkbox is not checked. 

[PatriciaV]

Please clarify what box is not checked on the 1098 worksheets.

How are the deductions different? Is your total loan balance over the limit? Are you expecting your interest deduction to be limited? Please provide specifics so we can provide better answers.