Multiple 1098s not from refinance

[dennis0708]

I received multiple 1098's from lender sales and turbo tax is automatically checking yes to "loan refinanced in 2022 with a new 1098" during the smart check.

When I check no to  "loan refinanced in 2022 with a new 1098" and no to "was this loan the result of refinancing a previous" loan for all of my 1098s my mortgage interest is reduced by half from the mortgage interest limited smart worksheet. The mortgage is under $750k and the mortgages were used to buy the home that secures the loan. I do cannot find the reason the adjustment is being made to the mortgage interest limited smart worksheet.

[KrisD15]

To clarify, why do you have more than one 1098? 

[dennis0708]

The mortgage was sold to another lender twice throughout the course of the year resulting in three 1098's

[DMarkM1]

Typically this mortgage interest limitation is corrected by selecting "NO this is not the latest 1098 on this loan" for the first two 1098s and then "Yes, this is the latest" on the most current 1098.  Basically this will tell TurboTax to ignore the loan amounts on the first two as all of these 1098's are the same loan (the current one).  

Since the loan is under $750,000 and all used to buy, build, improve your home that secures the loan all of the interest will be deductible. 

[dennis0708]

After following these steps I am still receiving the errors.

"Is the 1098 you're working on now the most recent for you loan?" no for two and yes for the latest

"Is this loan a home equity line of credit or a refinance of a previous loan?" No for all three

"Have you used the money from this loan exclusively on this home?" Yes for all three

 After answering these questions and smart check generates 3 errors "home mortgage interest worksheet: Refi must be entered"

In the home mortgage interest limitation smart worksheet line A is being automatically checked yes "loan refinanced in 2022 with a new 1098". Even though I checked no in the step by step.  When I check no to the refinance questions Line A and Line B of the Home Mortgage Interest Lamination Smart Worksheet, the mortgage interest is being limited in the Tax & Int Wks form by 50%.

[RobertB4444]

This multiple 1098 thing has always thrown this software for a loop.  And the fix is the same but annoying every time.

Take all of the 1098s for your main home and add them together as though you only had received one form.  You'll use the most recent 1098 for the other information on the form like the balance still owed and whatnot.

With only one 1098 for the system to work with you should be good to go.

@dennis0708 

[wc6a]

How should this be entered for multiple 1098s NOT for the same home (ie Home A is sold in April 2023 and home B is bought in June 2023). As others, when I enter the ending principal amount for Home A (as instructed by the software) - $753000 - and the current principle for home B -$565000- TurboTax erroneously sums the principal amounts together and limits the interest deduction amount by more than it should.

[RobertB4444]

Change the principal amount for home A to zero.  After all, it's paid off.  The amount you owe is zero now.

@wc6a 

[wc6a]

Thanks! So are the TurboTax software instructions to enter the principal balance as of Jan 1, 2023 inaccurate? The loan was not paid off until April 2023, so there was a balance as of January 2023.

@RobertB4444