Mortgage Interest Deduction with Almost Identical 1098's

[jtrem714]

I have a private mortgage from a close friend and his family. They both loaned 50/50 on the property.

I received two 1098's from them. One from my friend and the other from the Family Trust.

The problem is number-wise since they are carbon copies and TurboTax keeps tagging it as a duplicate. Then it was telling me that I can't deduct the full amount because I'm limited. 

I was able to get it to apply the full amount of interest by selecting that it wasn't the last 1098 received for the loan. 

Still have the issue of telling me its a duplicate in review, but I can override it. 

Did I go about entering this the correct way? 

[zomboo]

I assumed both loans qualify for mortgage interest deduction (secured loan on main or second home).

I just entered two 1098's with identical information except for the lender's name. I used Test 1 and Test 2 for the lender names. Turbo Tax detected possible duplicate 1098 information for my review. I pressed on and both were accepted without error.

Is the amount of each mortgage over $375,000? If so, the combined balance will over $750,000 and you will see a limitation.

[KrisD15]

It would make sense that the TurboTax program would alert you if the program thinks you are entering the form twice, however you don't say what the balance of the loans (both loan balances added together) is. 

If the loan balance total is not over $750,000, the loans are secured by your main home, and you paid the interest, over-riding the program (because  the two Form 1098's are so similar) that would be fine. 

@jtrem714 

[jtrem714]

Thank you for your help.

I paid a total of $25,394.86 in interest. Each 1098 shows $12,697.43 in box 1 

Box 2 on each 1098 shows the outstanding mortgage balance of $628729.34 

That is the correct loan balance.

So it’s thinking the loan balance is over a million correct? 

if that is the case is that amount wrong and it  should show box 2 with a balance $314,364.67 since the loan is secured by two different people (lenders)?

[DMarkM1]

Yes.  If each box 2 is showing over $600,000 then your total average mortgage debt does exceed $1M.  The box 2 amount on each 1098 should show the amount of the loan on 1 January 2023 (or opening date if loan started in 2023) for that lender only.  So if one lender loans 330,000 and the other 330,000 then each box 2 should have those amounts and the total average mortgage debt will not exceed $750,000.   

[jtrem714]

Thank you for this reply. I spoke with their CPA this morning and he admitted the error he's going to send corrected ones over showing box 2 with the 314k amount for each loan. 

Which then would make it the correct 628k total overall number. 

Appreciate all the help. 

[zomboo]

When you get the corrected 1098s, throw the originals away and only enter the corrected ones. Mark each as the latest received and ignore the duplicate information warning from Turbo Tax. It is only a warning for you to make sure you didn't enter duplicate 1098s. At least I hope that is all it is and Turbo Tax is not going to give you a hard time during the final review and filing.