Mortgage interest error

[smith29422]

Will not allow me to check box "No, none of these situations apply to me".  I've entered the interest for my three loans for my house (my loan was sold to another lender 2 times).  It looks like TiurboTax is adding the loan balances together; so, now I exceed the max $1-Million limit.

[D Ernst 65]

Ive run into the exact same problem,  refied twice and have interest from three mortgage companies.     as you described Turbo tax is treating this like three diff propertys exceeding the $750K or $1M limits and as such my $27,000 in interest is being reduced to $8500 on schedule A.     Have you figured out what needs to be done to fix this?     thanks,   Doug

[smith29422]

I have no idea how to fix this.  Do you know how to report this problem to Intuit?

Thanks,

-Gary

[AlanT222]

Some TurboTax customers are experiencing an issue with their Home Mortgage Average Balance. This can cause the Home Mortgage Interest to be incorrectly limited.

If you're experiencing the issue above,  please go here to receive email notifications when any updates related to this issue become available.

[DC164]

This is the same problem that occurred on 2019 taxes and to my knowledge the problem was never fixed.  When should be expect a fix so we can file our 2020 taxes.

[Cynthiad66]

Try this.  If there is a refi and there was an outstanding mortgage principal listed in both of them on Line 2 on the 1098. When you do put an outstanding balance in both forms, then the program adds them together and if that number is greater than $750k, then it puts you in the category to "limit interest". To get that to go away, you need to go back to the deductions section and click on "edit" mortgage interest statement. Change the line 2 of the mortgage that you no longer owe on (like the one that you refinanced and paid off) to a 0 (zero) because you have refinanced out of that loan and no longer have an "outstanding mortgage principal". Once you change one of them to zero (the one that was paid off by the refinance) then it should no longer pop up with that error at the end when you go to file. 

[smith29422]

It will not allow me to enter a zero into these fields.

[MikeDemler]

The error has nothing to do with "average interest". TurboTax is ignoring the start dates for re-fi mortgages, such that it causes them to be treated as concurrent. I proved this by monitoring how the interest deduction changed my refund. Adding my latest mortgage actually REDUCED my deduction! That proves that the program is treating it as an addition to the mortgage that preceded it, rather than independent.

[MikeDemler]

I saw the same result by changing the starting value of my current re-fi mortgage to zero, since it wasn't even in effect on 1/1/20, and the program asks for confirmation of the 1/1/21 outstanding balance. 

[DianeW777]

I hesitate to make another suggestion, although it has worked for me.  If your entry will not accept a $0 to allow the mortgage interest deduction, you should try putting $1 in the loan balance that has been paid off with the refinanced loan.

Key Point: 

Be sure you meet the necessary criteria for the full deduction. A mortgage debt that is below $750,000, (or $1M for grandfathered debt incurred on or before December 15, 2017) this means all of the mortgage interest would be allowed to be used on your itemized deductions as long as there was no cash taken out that was not used on the home (all borrowed funds were used to buy, build or improve the home). 

• Why is my home mortgage interest being limited?

[Craig2018]

TT needs to fix the software not suggest a workaround. This is ridiculous.

[MikeDemler]

This makes no sense whatsoever to me, but rather than a bug fix I found this when I clicked on "Multiple 1098 related to a Refinance done in 2020."

[MikeDemler]

And this for mortgages exceeding $750,000 ($375,000 filing separately). 

[pjarhead]

So basically we have to do the job of the software we paid out hard earned money for?  Lovely!  Wonder if the IRS will see the discrepancy between the forms the mortgage company sent and what we are claiming and trigger an audit?

[pjarhead]

Tells you to take the outstanding principal from the original loan?  Why not the final refinance loan?  This whole thing is just hokey.