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Make sure your second form is not marked "Corrected". If not, and they are from the same bank, you can follow these steps to combine the amounts and enter it as one 1098:
Next, finish adding info for boxes 2, 3, 7, and 11 using Form 1098 for the original loan.
Hi, can you please share what is the right way to do it? I also have 2 1098 as the loan was sold. This is not from refinancing. ( I refinanced in 2020 in November). Should I combine box1, use box2 from the latest 1098, box 3 I used the original origination date when I first had this loan in 2017, then box11 from the latest 1098. Is that how you do yours? Thanks!
Under tax law, you're limited on the amount of home interest you can deduct. The limit is based on the loan amount and date of the origination of debt. We want to make sure we calculate this correctly for you.
If you refinanced (or your loan was sold) last year, you’ll have a Form 1098 from your previous lender and one from the new lender. You’ll need both forms. Follow these steps to enter your mortgage info:
Next, finish by entering info for boxes 2, 3, 7, and 11 using Form 1098 for the original loan.
How do I handle multiple 1098 mortgage forms?
Thanks for responding but that isn’t my question. I refinanced in 2020, not 2021. I did your steps in 2020 tax return so no problem there.
In 2021, they sold the loan to someone else so now I have 2 1098s. I didn’t refinance in 2021. So I wonder how to process these two. Thanks.
You will want to enter each Form 1098 separately. The two lenders will both have sent a copy of their Form 1098 to the IRS, who will be looking to match them up with your return and TurboTax will ask if you have another to enter.
When it asks if it is a home equity line of credit (HELOC) or a refinance of a previous loan, please check No.
There was no opportunity to pull out money when the loan was sold, as with a refinance, so there is no need to check for proceeds. When people do pull out additional cash in a refinance, only the amount of the interest for the part of the loan for the house is deductible. That is why there are these questions.
Thanks for responding but the previous expert just advised me to add both firms together to report.
so I am confused. IRS will look for each form to be entered? I thought I can just combine the box1 and leave the origination date as my date of original loan purchase of 2017. Am I incorrect? Thanks.
Also if I follow your direction, what yo enter for box2, 3 and 11? Do enter the exact data shown on each form?
Yes, please enter all boxes as they come on the two Form 1098s. Because this is a loan that was sold, it is going to still be considered the original loan for interest purposes. Box 1 is the important entry here for your interest paments.
These questions are necessary for refinances and equity loans, where some people finance more than the original loan and use it for something other than the house. In that case, only interest for the part of the loan used for the home is deductible on Schedule A.
In some cases, when there is a loan over the limit of what is deducible, based on tax changes in 2018, and there are multiple Form 1098s, then we do recommend combining the forms. However, your case is a sold mortgage, so we do not have to use that option.
This TurboTax Help article explains multiple 1098 forms. In this article, there is a link to another article that discusses refinances when you might need to combine forms, just so you can see that it is not the case with your forms. Multiple 1098 forms
If you have any flags in review after entering the forms as they are shown, it would help our research to have a diagnostic file. This is a sanitized copy of your tax return that has all of your personal information removed but still has all of the forms and numbers entered. You can send one to us by following the directions below and posting the token number here so we can access the sanitized return.
TurboTax Online:
TurboTax Desktop/Download Versions:
Oh cool that makes sense. I did do the combined method in 2020 when I refinanced and it came out the correct results.
I was under the impression that I have to remain box3 the same as my original origination date as 2/1/2017 when I first bought this house so the $750K limitation doesn’t apply to me. Now these forms show 11/16/2020 and 11/3/2020 in box3. If I enter as it is, will that affect how much I am allowed to claim? I should be allowed to claim the whole interest amount.
I followed your instructions but it doesn’t work.
For both,
i answered “No” when it asks “ is the 1097 you’re working on now the most recent for your loan”?
i answered “Yes” when it asks “is this the original loan you used to buy your property?”
When it asks if it is a home equity line of credit (HELOC) or a refinance of a previous loan, i checked No.
The system only allowed one 1098 interest to pass which is incorrect. Did I answer the questions incorrectly?
Just to clarify, I would like to take a deeper look at this. You have been working in there for several attempts and you have an exception, followed by a refinance, followed by a sale of the loan. It would help to have a diagnostic file, which is a sanitized copy of your tax return that has all of your personal information removed but has all of the forms and numbers entered. You can send one to us by following the directions below and posting the token number here so we can access the sanitized return.
TurboTax Online:
TurboTax Desktop/Download Versions:
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