How to enter two (or more) 1098's when the loan servicing company changes.

[californiacyclist]

Greetings Community!

So, this isn't actually a question, rather it is a solution.  Without dissing the good folks at TT, they dropped the ball when developing the software as it relates to TurboTax handling two (or more) 1098's for the same indebtedness.  That is, when the servicing agent changes during the year.  This is the work-around solution I devised for my particular circumstance.

The issue is how TurboTax treats the value in box 2 of the 1098.  The box 2 value from the loan servicing agent that transferred your loan will show the balance as of January 1 for the reporting year.  This amount reflects the value of the loan at the beginning of the year - not the year-end balance.  The form from the loan servicing company that received your loan (current servicing agent) will probably be empty (no values).  This is because they do not have the responsibility of reporting the beginning balance of the loan since they were not the servicing agent at that time.  Unfortunately, TurboTax will not allow you to proceed with the tax preparation unless a value greater than $0.00 appears in Box 2 of the input screen.  Here's the workaround:

Complete the form, but leave the field in Box 2 blank.  Once the form is complete, and before selecting the "continue" option, switch to the forms view in TurboTax.  After launching the forms view, locate the "Home Interest Worksheet" (shown as, "Home Int Wkst (name of your servicing agent)" which will be noted as "Not Done".  Open the worksheet and scroll to the point where you see the line items that reflect the boxes on Form 1098.  Be sure Box 2 accurately reflects the value of Box 2 on the 1098 you received from your servicing agent.  Before switching TurboTax to the Step-by-Step view, select a different form from the Forms Menu, then navigate back to Step-by-Step to finish preparing your returns.   Ignore the "errors" shown by TurboTax when you run your error check as TurboTax doesn't know how to accurately report this situation.

This strategy worked successfully for our tax preparation, which was made all the more important because the loan values added together caused a reporting error for our CA returns, resulting in a tax increase of about $400.  It was definitely worth our time to ensure this issue was resolved.

Good luck!

@KathrynG3 @Kat @MaryK1 @ColeenD3 @Irene2805 @DanaB27 

[Kat · Accepted solution]

@californiacyclist Thank you for sharing your workaround.  However, there are a couple of important points I should add here.

1)  Forms view is available ONLY on Desktop (CD/Download) versions of TurboTax.  It is not available in the Online platform.

2)  Editing your return using Forms view negates the accuracy guarantee for TurboTax, and prevents e-filing.

I have reported this issue to TurboTax Moderators for investigation.

[californiacyclist]

Hi Kat,

So, it appears my "work around" is not solving my problem as TurboTax will not permit me to eFile the return without the alleged deficient information missing.  I could really use some technical support.

[Kat]

@californiacyclist Let me see what the status is of my reporting of your issue.  It may be a day or two before I hear anything, or one of the TurboTax Moderators responds here.  Someone may reach out to you via email, so make sure you email address in your TT account is updated.

I'll let you know if/when I hear anything.  I'm not in the Community all day, but do check in frequently.

Someone in TT Customer Support may be able to assist.  If you need to contact them, use the info in the TurboTax FAQ linked below.

https://ttlc.intuit.com/community/using-turbotax/help/what-is-the-turbotax-phone-number/01/25632

[RickG]

@californiacyclist Thank you so much for reaching out to the community about this issue.  I have looked over what you are experiencing and the conversation you've been having with @Kat.  We would like to investigate this issue further.  If you’re willing, we would like to ask if you could provide a Diagnostic File of your return.  This copy will be purged of all personally identifiable information.  If you are willing, please follow the instructions provided below to get us the information we need.

1. Sign-in to your online account. ​
2. Click on “Tax Tools” to the left hand side of the screen. ​
3. A drop-down will appear. Click on “Share My File With Agent”. ​
4. This will generate a message that a diagnostic copy will be created. Click “OK”. The tax file will then be sanitized and sent to us. This action will generate a Token Number
5. Please respond directly to this message and provide the Token Number that was generated. 

[Kat]

@californiacyclist Just pointing out that a TurboTax Moderator has reached out to you to offer assistance.  If there is indeed a bug in the program, your findings could be very helpful.  Thanks again!

[Kat]

@californiacyclist TurboTax could sure use your assistance, as requested by @RickG.  Do you think you could help, please?  Thank you!

[Carl]

I haven't read the entire thread here. Just the initial post. While your workaround works, the only problem is that when you make changes in forms view, not only do you negate the TurboTax 100% Accuracy Guarantee, but you also can not e-file the tax return. You have no choice but to print, sign and mail it to the IRS. If filing a state return also, then you have to mail the state return too.

[Kat · Accepted solution]

Thanks, @Carl .  Mentioned those issues as soon as I read the workaround.  User did soon come to realize the e-file limitation.

[Carl]

Ah okay. All I did was flag the post to get the attention of the moderators. But I'm not expecting any useful feedback until after the weekend. I realize the mods may be working weekends during the filing season. But I doubt the programmers or decision makers are.

[californiacyclist]

Hi Kat (and others),

My apology for the lengthy delay in responding to your messages.

 I was able to submit the return by entering $1 in Box 2 for the 2nd form 1098.  I'm not sure how this will affect our reporting in 2020, but I suspect it will not cause any problems.

I'm not so interested in supplying a diagnostic file as I'm not convinced personal information would be protected.  That said, I'd be willing to work with a specialist by way of telephone and providing the field inputs as I've experienced the issue.  Feel free to message me via this chat thread for instructions on how to connect in this manner.

Thanks for your interest and your help!

Joseph

[Kat]

@californiacyclist Thanks for your response.  @RickG would be the one to reach out to you.  (I primarily know nothing.)  🤔  You help is much appreciated.

[soniqfreq]

I was just trying to finish up my return on TurboTax web and noticed this also.  I posted the question elsewhere and got a reply from @DianeC958  that is right, put $0 in box 2 for the 1098 you enter that began in 2019.  I was just copying what was on the 1098 forms and didn't see the note to enter the principal  the amount as of 1/1/2019, which would be $0.

[giveemberg]

I am also facing this exact scenario.  I have tried entering $0 in box 2, but I receive an error that the "outstanding mortgage principal must have a value." I'm concerned about any implications the workaround of entering $1 has as suggested earlier? I would really prefer to have a solution incorporated by TT for this scenario! @Kat @RickG @soniqfreq @californiacyclist 

[KarenJ2]

When entering the 1098 from the second lender, use the same value for Box 2 reported on the 1098 from the first lender.