Outstanding mortgage principle, must have a value. there are cases where the value is at 0.00

[pk]

Value for what purpose -- to compute allowable mortgage interest deduction? for estate filing and distribution of assets? or what ? 

[jlrinard]

So what do I put as it wants a number when we paid off the mortgage???

[SteamTrain]

@jlrinard 

OK....If you are working on your 2019 tax return, that box 3 entry for the Form 1098, is actually the balance on 1/1/2019

….ie at the start of 2019, before you paid it off.

If you had your 1098 already, you'd see that it is, or should be, a positive-bigger number.   If you don't have your 1098 yet, just estimate a number for now, and Make Sure you return to the form in January to correct it.

[robertppoppe]

Seems like a software programming oversight.  If this is a qualified home equity loan, your balance can be zero on Jan 1, 2019 and zero on Dec 31, 2019, and still have a qualifying interest expense.

[pk]

@robertppoppe , yes , it is possible  but highly unlikely.  The programming is  generally geared to tackle  most common situations and the text of this particular provision in the statute is also written  the same way --- while  it does not disallow, it assumes  the usual scenario of a new or existing mortgage  with a term longer than one year -- the typical being 30 years.  If your case is such that mortgage was started after Jan 1 and was paid off before the end of the same year, you would have to have help Turbo by manipulating numbers by hand --- note that the reason the for the requirement of the Jan 1 and Dec 31st  amounts is to compute the average indebtedness for the year ( TCJA ).

Hope this helps

[tonerw2]

Will there not be an issue with the return if the value given for Item 2, Outstanding mortgage principal, does not agree with the Lenders Form 1098?

[DavidS127]

Yes, your entry into TurboTax for box 2 of your Form 1098 should match the number on the actual 1098 you received from the lender.

@tonerw2

[bf5p8pf]

I have this exact issue too.  "If this is a qualified home equity loan, your balance can be zero on Jan 1, 2019 and zero on Dec 31, 2019, and still have a qualifying interest expense."

I appreciate your answer, but I do not think is explains how to handle this situation when it does exist.  How do I handle this situation where box 2 is $0.00?

[DianeC958]

You can put in box 2 $1 for the balance on the loan and it will not affect your overall tax return and the program will give you the deduction for interest on the loan.

@bf5p8pf