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Becmgs1
Level 2

Mortgage Interest Deductions

We are married and sold our house (primary residence) on  April 10,  2019 and paid off the mortgage (taken out in 2013)  of $820,000. On the same day (April 10, 2019) we used the sale money to purchase  a new house (our new primary residence)  with a new mortgage of $650,000. The question is -  can we write off BOTH mortgage interest deductions  even though   the total amount of the loans for 2019 is more than 1 million dollars — Yet we only owed 1 home in 2019? Turbo tax seems not to like this 🙂

 

13 Replies
DianeC958
Expert Alumni

Mortgage Interest Deductions

Yes, you can write off the interest paid on both loans.

 

Please check the information you put into TurboTax for the second loan you took out.  In box 2 it is asking the balance of the mortgage as of 1/1/2019.  The answer for that box is $0.  If you have the $650,000 in that box that is why the program is reducing the amount of your interest deduction.

 

Change the amount in Box 2 and the full amount of mortgage interest you paid in 2019 will be deducted.

 

Link to Mortgage Refinance Tax Deduction

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Becmgs1
Level 2

Mortgage Interest Deductions

The loan on our first home was $850k which was sold in April 2019. The 1098 has that amount in box 2, even though it was paid in full in April 2019.  The new home that we bought in April 2019 has a new mortgage amount of $650k and in box w has that new mortgage amount. Are you saying that the box to on the new mortgage in April should be zero and not 650,000?

DianeC958
Expert Alumni

Mortgage Interest Deductions

Yes,  the amount that should be put in Box 2 for your mortgage should be $0.  Box 2 is asking the balance due on the loan as of 01/01/2019 since you did not take out the loan until April 2019 during the year at the beginning of 2019 the loan amount was $0.

 

Link to Deducting Mortgage Interest

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PETER2020
Returning Member

Mortgage Interest Deductions

TurboTax is really having a problem dealing with 2 mortgages in the same year.

 

I refinanced in 2019. TurboTax refuses to give me credit for the mortgage interest paid. I paid more than 23,0000 in interest and more than 23,000 in SALT, plus charitable donations, so the standard deduction is not the correct choice.

 

After entering the 2 mortgages, and clicking done, it says "Congrats, you are getting a tax break for the interest you paid." It lies.

 

Turbo Tax is insistent I take the Standard deduction. If I tell it to use itemized it clearly shows no credit for the mortgage interest, wanting me to pay thousands more in taxes.

 

"Box 2 is asking the balance due on the loan as of 01/01/2019 "

Then why doesn't it just say that?

I tried putting in zero for the second loan. No help.

I tried deleting both loans and adding them back in. No help.

 

When I click on Forms, Schedule A, like 8a shows zero for Mortgage Interest. While I can see my other forms like the 1099s, neither of the 1098 forms are listed.

 

I have used TurboTax every year for the past 15 years.

 

 

NCperson
Level 15

Mortgage Interest Deductions

@PETER2020 just enter it all as if were one mortgage (sum them together) ....... save your self the headache 🙂 

PETER2020
Returning Member

Mortgage Interest Deductions

It did actually give me the deduction on the first pass, but when I ran the error checker it found some errors and after "correcting" them the amount owed in taxes skyrocketed and its because it refuses to give me credit for interest paid.

 

I tried deleting them both and only adding one. It doesn't help. Its stuck. There is a bug.

 

Looking at the Forms, no 1098s are listed. Schedule A, Row 8 is zero.

 

PETER2020
Returning Member

Mortgage Interest Deductions

Although my 1098s cannot be found in the Forms section, I do see the Mortgage Interest worksheets. They didn't have all the fields filled in. I edited them directly, no luck. TurboTax refuses to reinstate the credit for all the interest I paid that it was initially showing and somehow removed after an error check.

 

I deleted and added the 1098 info again. Again its congratulating me on the interest that will be deducted when I save that section, but no matter how many times I error check it, it refuses to give the credit and keeps the value as zero on row 8 in Schedule A.

 

I've had enough tonight. Tomorrow I will start from scratch and redo everything in a new tax return. Maybe that will work.

 

Sigh. I use Turbo Tax to save time and money, not overpay thousands or reenter all the same data multiple times.

Becmgs1
Level 2

Mortgage Interest Deductions

Into it has not fix the problem. Don’t bother making more work for yourself

Pyrarraz
Level 2

Mortgage Interest Deductions

I deleted all three 1098s, and then added up all the interest and entered it as if it were a single 1098. It still won't let me take the mortgage interest deduction. 20 years of using TT, and In have never seen a bug of such epic proportions!!!

Becmgs1
Level 2

Mortgage Interest Deductions

They screwed up and they don’t care 

Pyrarraz
Level 2

Mortgage Interest Deductions

With the help of a real good TT employee on the phone, I found a workaround.

In "Forms," find the "Tax and Interest Deduction Worksheet." 

Scroll down to the Mortgage Interest Limited Smart Worksheet."

If field A 1 is blank, right click it, and select "Override", then write in the total of mortgage interest paid, from all 1098 forms.

Once field A 1 has the total of mortgage interest paid, copy that amount.

If field A 2 is blank, right click it, and select "Override", then AGAIN  write in the total of mortgage interest paid, from all 1098 forms.

That should fix it!

 

rahulratan
New Member

Mortgage Interest Deductions

Thanks, that fixed my problem! For me A2 was 0, A1 was OK. I wrote the amount from A1 in A2 and then TT took  the itemized deduction.

 

This is a MAJOR bug. It  needs to be fixed ASAP.

knbeagle
New Member

Mortgage Interest Deductions

THANK YOU!!!!! I was able to click the "no" button for limiting the mortgage. TurboTax really needs to fix that bug. My mortgage was sold several times, which is fairly common these days, but I guess was making it seem like the home value was much greater than reality. So disappointed TurboTax! That was a frustration level I did not need.

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