In the Fix Errors step, there is a large Negative Principal Paid amount of -395,000 which is the same figure as the principal balance at year end?
Be sure to enter 0 (zero) as the ending (01/01/2019) balance of the loan that was bought.
make sure Box 2 has the beginning balance of the loan for either
January 1, of the tax year (in this case 01/01/2018)
The balance on the date the loan was originated or transferred if originated or transferred in the tax year (in this case 2018)
[edited 02/11/2019 I 5:34 PM]
The IRS has changed the wording for Box 2 for just this situation. Instructions were- "Box 2. Shows the outstanding mortgage principal on the mortgage as of January 1, 2018."
But they are changing it to- "Box 2. Shows the outstanding principal on the mortgage as of January 1, If the mortgage originated in 2018, shows the mortgage principal as of the date of origination. If the recipient/lender acquired the loan in 2018, shows the mortgage principal as of the date of acquisition."
For the purchasing bank/current bank that now has your mortgage, Boxes 1&3 and the taxes enter those figures as seen on the mortgage statement. Box 2- Do NOT enter zero, rather enter the same figure that was transferred from the previous bank.
In the Ending Mortgage balance- enter the last principal balance of your mortgage of 2018. For my mortgage the last payment was December 1, 2018 so that was my Ending balance of the year as my next payment was the following year.