Mortgage interest limitation without 1098

[T K]

Hello,

I got my house and I took a loan from a private lender with more than 750k. The lender didnt send me 1098 but sent me a statement which shows for every month how much interest I paid and what is the remaining balance. Something like the picture below

Now I have the following questions:

1. How to calculate the interest and apply the limitation of 750000?

2. What should be the outstanding mortgage principle ? Is it the last value which is 890000?

3. What should the answer for the question below? I am expecting it should be no

4. How can I adjust the mortgage in state tax? I dont see an option to modify it there

Thanks alot

[DMarkM1]

When entering your mortgage information without a form 1098.  Box 1 will be the total interest paid in 2022.  Box 2 will be the outstanding balance on 1 Jan 2022 ($1M in your scenario).  Box 3 will be the date you took out the loan originally.  If the loan is secured by your home mark box 7.  If not, leave it blank and answer yes or no to the follow on question asking if the loan is on a property you own.  Answer the "Refi" questions as applicable.  Answer "Yes" to the question "Is the the latest 1098 on your loan?"  

Assuming this is your only mortgage, continue through the interview and click "Done" you should then arrive at a page that says your interest has been limited and gives you the opportunity to enter an adjusted amount. 

Using the general numbers you provided you can find the correct limited interest to go in the "Adjustment" box.  

First balance plus last balance / 2 ($1M + 890K)/2 = 945K    You state based on the loan origination date that $750K is your loan limit.  So 750/945 = .7937   Multiply .7937 x total interest paid that you entered in Box 1 (32,400 for example) = 26,040 deductible interest.  

Once you have completed the mortgage interest topic in the federal interview you can return to the CA state interview.  The page you showed was the correct page to find the Home Mortgage Interest adjustment under the "Home" section.  You will be able to view/edit that adjustment.  TurboTax will automatically make the CA adjustment but you can verify.  All of the interest in your scenario should be deductible on the CA return since the average balance is below $1M.  

[T K]

Thanks alot for your reply

Here is what I did, please let me know if that is what it should be

And now I see CA adjustment with the correct value. I see the deductible interest is 25,397 but you mentioned 26,040 but I am assuming the value mentioned in TT is more accurate.

But all that depending on the answer "yes" for the following question. So given that I dont have 1098, why I should answer yes here? Also the adjustment in CA return is because I answered here yes, if I answered no it will be editable, right?

Best Regards

[DMarkM1]

That all appears correct except you don't need a box 11 entry.  That date is to indicate a mortgage was sold/transferred to another lender.  You should leave it blank.  

The number I gave for deductible interest was based on made up general numbers so based on your entries 25397 is accurate.  

A better way to read the question about the most recent 1098 for you might be "Is the information entered" the most recent loan.  Answer "Yes".  A "No" answer would be if the loan was sold to another lender for example.  You would get two 1098s but only the last one is the most recent on the loan.