We relocated and sold our primary house in California on 07/03/2019 (House in California was purchased on 07/2007) this loan was paid off with the sale of the house. The loan amount was 360,000
Then on 08/30/2019 due to work relocation, we purchase a house in Massachusetts, a loan amount of $500,000. For this property in Massachusetts, we have received 2 1098 forms because the loan was sold immediately to another bank with a new mortgage balance of 499,246.00. The original bank
Question 1. Do I have Have to limit the mortgage interest?
Question 2. Turbo Tax is taking as if I have outstanding loans in the amount of $999,246.00, how do I make turbo tax understand that is the same loan for the same property for the federal and also for the state of massachussets.
question 1: no - it's the AVERAGE balance for the year that has to exceed $750,000 for there to be limitations on the interest.
you had a 12 month average of approximately
jan: 360
feb:360
Mar: 360
Apr: 360
May:360
June: 360
July: 0
aug: 0
Sept - Dec: 500 each month
so the average is well below $750k
I suspect you answered one of the questions wrong on the 1098. Please go back and review closely.
you really have 3 1098's right (1 from the old loan and 2 from the new loan). if you want to reduce the 'head banging, just take the 2 from the new mortgage and consider them as one 1098. the servicing sale does make it confusing. it won't change the outcome - all the interest should be deductible,