Multiple 1098s from bought and sold my main home

[gwarhtw]

I have the TurboTax Premier CD version.  Received two 1098s due to selling and buying main residence. In this forum, the advise is to enter two 1098s one at a time. However, the help screen in the CD version said to ADD the mortgage interests, insurance, and property tax from the two 1098s then enter, but use the mortgage principal balance and loan origination date from the new home 1098.  Which one is the right way to enter the information? Thanks! 

[Cynthiad66]

Definitely do not add the insurance and taxes to the interest.  There are separate boxes for Mortgage Insurance Premiums and Property Taxes.

There is a known problem with Home Mortgage Deduction.  TurboTax is working to fix the problem and the many other issues. There are many changes due to the CARES Act that require software upgrades.  We have not been given an  expected date for the fix yet.  Please check back often to see if you can file your return.

OR

In the meantime, you can try this work around.  You did not provide the details of your Mortgage situation and therefore I am giving you a general work around that might help.  Please 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. 

[gwarhtw]

Sorry I did not make it clear, the help screen said to add two mortgage interest from two 1098s and enter into box 1 and do the same things for insurance (box 5) and property tax.  

[ReneeM7122]

Correct.  

1. Add the Box 5 amount from each form and enter the total as Box 5 Mortgage insurance premiums. (If you weren’t required to pay mortgage interest, these boxes will be blank on your forms and you won’t enter anything.)
2. Grab a calculator and add together the box 1 amount from each form. Enter the total in TurboTax as Box 1 Mortgage interest.

@gwarhtw

[gwarhtw]

Do I put both lender's name in if I'm adding two 1098s for box 1 (one for the place I sold and one for the one I bought)?  If adding both property tax as suggested by TurboTax, I will just enter the outstanding  principal for the place I bought and ignore the box 2 number from the 1098 issued by my previous lender for the place I sold, correct?  

[JohnB5677]

No, put the most recent lenders name.  That way it will carry forward to next year.

Please note: If your mortgage ends early because you paid it off, refinanced it with another lender or sold the home, you can deduct any remaining points for the original mortgage in that year. 

[DIY127]

I just want to be sure that I understand this because i'm in the same situation as the original poster. I sold my primary residence in March 2020 and I closed on a new primary residence in April 2020. Should I add the information my 1098's together as the Turbo Tax Premier CD software is suggesting, or should I enter the 2 1098's as 2 separate 1098's in TurboTax?

[AmyC]

@DIY127 If either mortgage had a balance over $750,000 and you have limited interest, then you do want to enter them separately and let the computer calculate your limits. Otherwise, add them together and use the newest balance.