Multiple 1098's due to Mortgage Service Provider t...
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jet37
Level 2

Multiple 1098's due to Mortgage Service Provider transfer incorrectly triggers the $750,000 principal limit on home loan interest deductions

TurboTax is incorrectly combining mortgage loan principal (Box 2) from multiple 1098 forms due to a mortgage service transfer (not refinance). Several work arounds have been suggested that do not work. When can we expect to have this corrected?

3 Replies
VictoriaD75
Expert Alumni

Multiple 1098's due to Mortgage Service Provider transfer incorrectly triggers the $750,000 principal limit on home loan interest deductions

There is a workaround for this. 

 

For desktop versions:

  • In Forms view, locate and click on Tax & Int Wks on the left from the forms list
  • On the form, scroll to Mortgage Interest Limited Smart Worksheet
  • Click on NO to the right of the question, Does your mortgage interest need to be limited

For online versions:

  • Under Deductions & Credits, expand the menu for Your Home
  • Click Start/Revisit next to Mortgage Interest and Refinancing (Form 1098)
  • Click through until you get to a screen that says Do any of these situations apply to you? Mark Yes.
  • On the next screen, take out the zero.
  • Click back and choose No.
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rmacinnis
Returning Member

Multiple 1098's due to Mortgage Service Provider transfer incorrectly triggers the $750,000 principal limit on home loan interest deductions

On the desktop version, you need to right click and choose override, before you are allowed to change to NO

Cynthiad66
Employee Tax Expert

Multiple 1098's due to Mortgage Service Provider transfer incorrectly triggers the $750,000 principal limit on home loan interest deductions

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. 

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