I received two 1098 forms as my loan was sold. Do I add the amounts together when filing taxes? All figures were different except one which was the property tax.

[agoy]

Did anyone find a solution to this? popsticker summarized it very well.

Entering two 1098 works fine for federal but state counts the balance as double than actual.

Only way to solve this problem is to combine interest from the two 1098's in one and enter as a single 1098.

Anyone, please suggest if you could find a solution to this problem.

[mlevine11]

I'm encountering the exact same issue and am at my wit's end. I can't generate the mortgage interest adjustment worksheet for California correctly (the software has deemed the two 1098's two distinct loans) and am worried I will have to amend my return.

[tmrito]

I also received two 1098 forms because my loan was transferred to another mortgage company. I believe the second 1098 form has the combined mortgage interest from both lenders. When I compare the amounts to last year's mortgage interest they are very similar. If I add the two amounts together it comes out to over $20,000! If I use the one from the newest company it is very close to last year's amount. I would suggest just going with the newest 1098. I hope that makes sense!

[me12071]

I am having the exact same problem...the answer they provided is crap

[DianeW777]

Thank you for providing this information. We are aware of this experience. Please sign up for email notification when an update related to this issue is available here.

If you choose to move forward with your return and if you have a mortgage debt that is below $750,000, (or $1M for grandfathered debt incurred on or before December 15, 2017) and there was no cash used for something other than to buy, build or improve the home, this means all of the mortgage interest would be allowed to be used on your itemized deductions. If this is your situation then enter the mortgage debt for Form 1098 with the current lender, and then enter $1 or $0 for the second or former lender in that Form 1098. This will provide the correct amount of allowed mortgage interest deduction.

You may want to delete them first to begin again and also clearing your cache and cookies is a good ides (regularly).

Here's how to enter your mortgage interest statement in TurboTax:

• With your return open, search for 1098 and select the Jump to link in the search results.
• Follow the instructions to enter your 1098 info.

For more information use this link: IRS Publication 936

[Edited: 02/07.2021 | 10:33a PST]

[mlevine11]

That's only a solution for those who have read this thread and is absolutely not intuitive to anyone else encountering this situation. The fact that this case isn't covered clearly by the software is simply insane.

[JohnB5677]

The IRS instructions for completing Form 1098 state that box 2 should be the amount of outstanding principal on the mortgage as of January 1, 2021.  If the loan was no longer being serviced by that company, there would be no outstanding principal on that mortgage.  

Entering '0' into box 2 for the first mortgage in your tax return is the correct way to handle the situation.

[jmorgand72768]

I just found that the correct answer is to use H&R Block's website.  This was an absolute deal-killer for me.  Ridiculous.  And not one of the so-called expert preparers had a clue how to answer this.  

[Vralex]

What was the answer they gave you? 

[JotikaT2]

You can enter them separately.  If the total amount of your mortgage balance exceeds $750,000, then the amount might be limited.  

Mortgage interest deduction limits

Since you just refinanced and if your total loan balance did not exceed $750,000 throughout the year, you will need to review your input.  When you enter the information into TurboTax, be sure to do the following to ensure you are able to deduct the full amount you are entitled to.

1. Go to the federal section of the return
2. Select Deductions & Credits
3. Select Mortgage Interest and Refinancing (Form 1098)
4. Select Add a Lender

As you go through the input screens, be sure that you have entered $0 for the loan that was paid off in Box 2 - Outstanding mortgage principal on the screen titled Let's get the details from your Home loan 1098.

You will also want to select that the loan that was refinanced and is no longer there at the end of the year is marked as paid off during the year.

Please see the following link for additional information on entering the refinanced mortgage interest expense.

Refinanced mortgage input

[robertoruizch]

I am having a similar issue.  I received two 1098 forms.  One is from our original mortgage company, and the only boxes filled out are 1,3,5,6,7(x),8,and 9.  When I enter in the information online it says "needs review" and asks for something to be entered in box 2,and property (real estate) taxes but those boxes are blank on my 1098.   We never maid any mortgage payments to our original lender since it was sold right away.  I am not sure if I need to leave these blank or if something needs to be filled out. 

[ReneeM7122]

No, do not combine the 1098 forms when a loan is sold from one bank to another.  The combining of 1098 forms is done when there is a refinance, for example, but in this instance, you had no control and the loan did not change except to whom the payment is made.  Since you never made any payments to the original mortgage lender, don't use that 1098.  

@robertoruizch

[KT2470]

That is incorrect.
The IRS instructions for completing Form 1098 state that box 2 should be the amount of outstanding principal on the mortgage as of January 1, 2020.

[DaveF1006]

Yes, use the outstanding loan amount for 01/01/2020 and then combine the other boxes such as mortgage interest, points, and property taxes.

[Ma9812--]

I got two 1098 forms from same bank