Incorrect Calculation of Interest Deduction

[amrm03]

My brother and I are sharing a mortgage with over $750,000. I know for a fact that the interest will be subjected to a limit. I did my tax return and it's calculating my interest deduction correctly but when I did my brother's tax return, turbotax is deducting the full amount. I think the issue is  because his SSN is not reported on the 1098 form. I played around with it and if I chose the option where it says that 1098 shows his SSN, it will calculate the correct interest deduction with the application of the limit. How can you solve this? The interest deduction amount should be the same amount for both of us since we split it evenly.

[MarilynG1]

Are both of your names on the Mortgage?  If so, you are correct that you can split the Mortgage Interest Deduction however you agree on.

There is a box to check to indicate 'the amount of mortgage interest I entered is not what's on the 1098' since you are each only claiming half of the amount on the 1098.

Only enter your half of what you are claiming on your individual returns, and check this box to indicate that the amount you are entering is different from what is on the 1098.

Click this link for more info on Splitting Mortgage Interest.

[amrm03]

Yes, both of our names are in the mortgage. We split it 50:50 but that’s not the issue. Let’s say the total interest is $10,000. We can deduct $5,000 each but since our mortgage is over $750k, it will be limited. In this example, let’s just say $4,000 is the deductible interest for each of us if the limit considered. The problem now is in my return, the deductible interest is showing as $4,000 but in my brother’s return, it is still $5,000. It should be the same. So, I tried to play around with it, if I click the option saying “I co-own this loan but my SSN is NOT on the 1098”, the full $5,000 is being deducted but if I choose “I co-own this loan and my SSN is on the 1098”, the interest is calculated correctly at $4,000. That is what I find really strange!

[ThomasM125]

I'm not sure why the responses generate different treatments in TurboTax. However, since your brother's name and social security number is not on the form 1098, you could choose the third response None of the Above and that should resolve your issue.

Also, you could choose the second option you mention, and the Schedule A will be populated correctly. Schedule A will simply report that the interest is or is not reported on a form 1098, it doesn't address the issue of who's name or social security number is on it.