multiple 1098s when loans are transferred make it LOOK like a larger outstanding balance

[schaackmobile]

Hi there,

I am trying to properly deduct mortgage interest paid on multiple loans, one of which was transferred between lenders in 2024. Because both 1098s say that "outstanding mortgage principal" in Box 2, it looks like I have way more debt than I actually  have (almost double), because Turbotax is treating these like multiple loans on a single property, rather than a transferred loan. Is there a way for me to get into the form and amend this manually since the question prompts do not allow me to report the debt total accurately (and there is a cap on the amount of interest that you can claim that I have not reached, but it LOOKS like I have reached it because of this glitch in the software).

Thank you!

[LindaS5247]

It is better to answer the questions in the Form 1098 section of TurboTax correctly. 

If you have TurboTax Desktop, you can get to your form(s) while in Forms Mode, but not all entries are editable. To switch to Forms Mode in TurboTax Desktop, you can click on "Forms" in the upper right of your screen and your forms will appear in your left panel.

In order for TurboTax to properly determine your mortgage deductions, you must answer the questions in TurboTax correctly for TurboTax to recognize that one loan is the original loan and one is a transfer.

Enter the original loan first

1. Go to the screen that says asks if you paid a home loan in 2024, answer "Yes".
2. Enter your Form 1098 information from your original mortgage.
3. It will ask, "Is this 1098 the most recent for your loan?", Answer No." 
4. Answer the remaining questions regarding your original loan

Enter the 1098 for the new loan second:

1. On the "Your 1098 summary screen", select "Add a new 1098".
2. Enter the details from your 1098 for the refinanced loan.
3. It will ask, "Is this 1098 the most recent for this loan?"  Answer, "Yes". This lets TurboTax know that this is the most recent loan balance to use for your deduction.
4. On the "Let's get some details about this loan" screen, make sure to  answer "This loan is a refinance of a previous loan".
5. When you see "Thanks, we got all your mortgage info" select Continue.
6. When you're all done, you'll see both of your forms on the "Your 1098 Summary" screen. 
7. You can select Done to finish.

Enter your Form 1098 from your original loan first.  Answer "No" to "Is this the most recent for your loan?"

Click here for How Does Refinancing a Home Affect My Taxes?"

Click here for How Do I Handle Multiple 1098's?

[schaackmobile]

Unfortunately, this reply does not solve the problem. I did all of that. This is NOT a refinance, this is just a loan transfer (which mortgage companies do all the time).

But the balance on the loan appears in BOTH of the 1098s I received. So, in order to report the interest I paid, I have to enter both of them. But then the balance on my loan LOOKS like it is double, because I have to fill out all the info for both 1098s. This is a problem if you factor in there is a limit on how much property debt you are allowed to get a deduction on the mortgage interest for.

Thanks for trying to answer it, but this is a case where the software is not programmed correctly to deal with multiple 1098s.

[LindaS5247]

It is the same question for a refinance or a mortgage that was sold to another lender.  As you stated, this is very common.

 Make sure that you entered your 1098 from your original lender first.  And answered "No", that it is not the latest Form 1098. Enter the second Form 1098 next and answer "Yes" to the question. is the Form 1098 the most recent.

You should also try deleting your Forms 1098 and entering them this way.  

To delete a Form 1098, you can do the following if you are using TurboTax Desktop:

1. Click on "Forms" at the top right of your TurboTax screen to switch to "Forms Mode"
2. In your left panel search for "Form 1098"stated, this
3. At the bottom left of your "Form 1098" click on Delete Form
4. A box will appear to confirm the deletion, Select "Yes"

If you are using TurboTax Online you can delete a Form 1098  as follows:

1. Continue your return
2. Choose "Tax Tools" option on the left menu bar in the federal section of TurboTax
3. Choose "Tools"
4. Under "Other Helpful Links" choose "Delete a form"
5. Find the Form 1098 and click on the option to delete it

To manually enter a Form 1098 in TurboTax you can do the following:

1. Click on the search icon at the top right of your TurboTax screen
2. Type "1098" in the search bar
3. Click on the link "Jump to 1098"
4. Enter your Form 1098 and answer all of the follow-up questions accurately

Your TurboTax screens will look something like this:

[schaackmobile]

This is NOT a refinance. Your answer does not address my question.

[LindaS5247]

I completely understand that itis not a refinance of your mortgage. It is the same for a refinance or if your mortgage was sold. Please read the highlighted area in the screenshot below.