Two 1098s from selling/buying House in 2021

[RobertB4444]

Yes, @tombones the deductible mortgage interest worksheet should be available now.

[e3smith]

The new form seems to still be just adding the two 1098s together, not averaging them.  How can you input the correct value in TT web version here?

[tombones]

I'm (still) having the same problem.

I have three 1098s: Two from the new primary home I bought in May (the original lender and the loan servicer who immediately bought it) and one from the old primary home I sold in June. Turbotax Online doesn't have any way for me to indicate that one of the homes was sold, or which one is my current primary residence. Consequently, it's miscalculating the input from the 3 forms and sticking me in the Standard Deduction incorrectly, resulting in a reduction in several thousand dollars from my refund.

I won't be able to file until this is corrected, or until someone clearly explains how I can accurately enter the numbers from these forms while still getting the final number to calculate correctly. I've been searching the help forums for weeks and have yet to find instructions that actually worked. This seems like it should be an extremely common scenario (buying and selling a house in the same year to move to a new place). How is Turbotax not equipped to handle it?

[e3smith]

Similar issue for me.  Only two 1098s, each for partial year.  TT is still coming to the incorrect number based on my reading of Pub 936.  As far as I can tell, no way to enter these to get the calculation correct

[RaifH]

It would be helpful to have a TurboTax ".tax2021" file that is experiencing this issue.

You can send us a “diagnostic” file that has your “numbers” but not your personal information.  If you would like to do this, here are the instructions: 

Go to the black panel on the left side of your program and select Tax Tools. 

1. Then select Tools below Tax Tools. 
2. A window will pop up which says Tools Center.  
3. On this screen, select Share my file with Agent. 
4. You will see a message explaining what the diagnostic copy is.  Click okay through this screen and then you will get a Token number. 
5. Reply to this thread with your Token number. This will allow us to open a copy of your return without seeing any personal information.  

We will then be able to see exactly what you are seeing and we can determine what exactly is going on in your return and provide you with a resolution. 

@tombones @e3smith

[halerinard]

I have the same issue, especially I have one loan with principal exceeding $750k limit. TT seems doing wrong calculations here. I'm using desktop Premier version, how can I get more help or send you a diagnostic file?

[RaifH]

Do you only have one Form 1098 to report in 2021? If so, report it in this way:

1. In the Federal > Deductions & Credits section of your return, scroll down to Your Home and click Revisit/Start next to Mortgage Interest and Refinancing (Form 1098)
2. Edit your existing 1098. 
3. Answer the questions and enter the information from your Form 1098s. For the Box 3 Mortgage Origination Date, use the original purchase date even if this is a refinance.
4. Answer What kind of property is this loan secured by?
5. Answer Yes or No to  We didn't pay any points.
6. Answer Yes to Let's see if this is the most recent form for this loan.
7. Answer No to Is this the original loan used to buy your property? 
8. Answer Is this loan a HELOC or a refinance? 
9. Answer Did you take cash out? if it is a HELOC or refinance.
10. Once you are back in the Home loan deduction summary screen, click Done.
11. Answer NO to Do either of these apply to this loan? Answer No even if it does apply, by using the mortgage origin date of the original purchase back in step 3, TurboTax will correctly apply the proper mortgage limit on your home acquisition debt. 
12. Enter the outstanding loan balance on January 1, 2022 in the first field. Leave the second field blank.

If that does not solve the issue, please let me know your exact situation.

@halerinard

[Swolpert]

Turbo Tax Premier 2021 will not let me enter ZERO in Box 2 for the outstanding Mortgage Principal for the 1098 for the house I sold and mortgage that was paid off.  What am I missing?  I entered $1 to allow the software to recognize the deduction.

[RaifH]

Box 2 does require an amount greater than 0. Changing the amount may affect your deductible mortgage interest. If your average balance is under $750,000 for the year, then this won't be an issue and entering $1 is fine. 

@Swolpert

[amwd007]

Then how about for the question: Is the 1098 you’re working on now the most recent for your loan?

Let's say,

 - I bought a another home on 06/01/2021, whose principle is above $750k cap, and the interest charged from 06/01/2021 - 12/31/2021 is X;

 - I sold my old home on 07/01/2021, whose principle is below $750k cap, and the interest charged from 01/01/2021 - 06/30/2021 is Y.

Now I received two 1098 forms. The complicated part is that, throughout 2021, from 01/01/2021 - 05/31/2021, my principle is definetely below $750k cap. But from 06/01/2021 - 12/31/2021, my principle cap is above $750k.

When answering the question "Is the 1098 you’re working on now the most recent for your loan?" for my old home's 1098, should I mark Yes or No?

Thanks!

[RaifH]

Mark No for your old home. Make both loans for your primary home. When you enter it this way, TurboTax will disregard the outstanding mortgage principal on your old home and only use the outstanding balance from the new home to calculate your deductible interest limit. It will still include all the interest paid on your old home. 

Since your mortgage on the new home exceeds $750,000, TurboTax will also ask for the balance on January 1, 2022. It will determine the average balance by taking the average of the outstanding mortgage principal in box 2 and the balance on January 1, 2022. 

@amwd007