My mortgage was sold to another lender and I have 1098 forms from 2 lenders. How do I enter the second one

[flgirl20211]

I had the same issue so I put the same loan beginning balance for both servicers like caseycg noted above, but each had their own ending balance.  Seems turbotax assumes that a beginning balance of zero equates to a new loan not used to buy or build your home in 2018 (?).  Hopefully we will get a response and fix to the problem.

[Chris99155]

Yes, I have the same problem with a mortgage that was sold to a new lender. If I enter a single lender and the combined amount of interest, with initial and final principal for the year, my refund amount is quite a bit higher than when I enter both 1098s separately. This is clearly a software bug and needs fixing soon, or I'm dumping TurboTax, using a different product, and getting a refund from Intuit, since they supposedly claim to give the biggest tax refund or your money back.

[MinhT]

This is an old thread. Can you please post a new question describing your situation so that it can receive the attention it deserves. This thread will be closed.

[Accounter]

I have the same problem as the posters above and I can't find the solution. Not sure why you're closing the thread without providing one.

[ThomasM125]

You should enter both forms 1098's into TurboTax. The loan origination date is used to determine the maximum loan amount to use in deciding how much of the interest is deductible.

If the loan was sold to a new lender, as opposed to being a refinance, then enter the date of the original loan on both entries when asked for that information.

Then ending loan balance for both entries needs to be the balance at the end of the year. 

The balance of the mortgage at the beginning of the year would be the same amount on both entries.

[disergio]

I entered both forms 1098 from different lenders for the same mortgage. I had lender changed starting from April. Both forms have the same mortgage origination date. But TT took these two forms as two different mortgages and summed up both (they are different) outstanding mortgage principals. Something is wrong here. 

[MaryK4]

See ThomasM125's answer right above- the ending loan balance for both entries needs to be the balance at the end of the year for it to calculate correctly.  @disergio

[disergio]

I am not sure If I follow his answer.

I entered both 1098 forms from different mortgage lenders.

The both have the same origination date(3).

But they have different mortgage acquisition dates (11), January 01 and  April 01 2019.

As a result they have different outstanding mortgage principals(2) and different mortgage interest received (1).

I entered it all but TT still treats them as two separate mortgages.

[DaveF1006]

They are considered two different mortgages for income tax purposes.

[disergio]

I would agree with this but TT sums them up and treats as a doubled mortgage now. Then more questions follow about eligibility to deduct interest you paid for such a big mortgage. In this regard TT EasyStep does not work correctly.

So this is why you should go to real forms and adjust some numbers there with hope you don't break anything. TT Easy Step does not offer to enter a lot of fields. And if you return from Forms to EasyStep Mortgage topic you will break this again.

[Chris99155]

That is absolutely right. TT treats a bought-and-sold mortgage as two separate mortgages which sum up to twice the correct amount, resulting in problems with interest deductibility if the total is over some large amount like $700k. There is no provision in EasyStep to mark these 1098 forms as applying to the same mortgage, the first up to a certain date and the second starting at that date.

For tax year 2018, when I had this situation, I ended up getting a refund for my TurboTax purchase and using a tax professional instead, at greater cost - but at least they didn't screw this up.

Please, Intuit, fix this bug.

[SMay]

Seems that they did finally add some instructions on how to do this. Just gotta pay more attention than I did at first. >_<

[markmc5447]

So they fixed it? SMay, you missed it the first time, then paid more attention and found it??? What was it that you missed the first time?

[KathrynG3]

The mortgage interest deduction may not be straightforward. If the home debt is over $750,000 for Married Filing Jointly or if the second mortgage was not used on home improvements, the deduction is reduced or eliminated. Without being aware of these limits, the necessary details may not be entered to capture the situation accurately.

The total itemized deductions are then compared to the standard deduction. 

For more instruction, see:

What do I do if I have multiple 1098s from refinancing my home debt?

Deducting Mortgage Interest FAQs - TurboTax Tax Tips & Videos

@markmc5447

[Chris99155]

Sorry KathrynG3, that's not the point. What we're all complaining about it how EasyStep in TurboTax treats a _single_ mortgage, say $400000, that was simply sold from one lender to another lender during the year. This results in a 1098 form from _each_ lender, which, when entered into TurboTax, gets treated as 2 separate mortgages, totaling $800000, and consequently getting a totally wrong number for the interest deduction (since it was over the $750k limit).

Entering the data from *one* lender's 1098, but adding in the interest and property taxes paid from the other 1098, so the numbers are true and correct, results in a correct deduction in TurboTax, but then the tax return wouldn't agree with the data already reported to the IRS by the lenders.

Put simply: it appears that TurboTax has no way to indicate that ONE mortgage had TWO lenders during the year.