Received multiple 1098-t forms. Unsure how to answer these two questions for each: 1) "Was this loan paid off or refinanced with a different lender in 2020?" 2) "Is this loan a home equity line of credit or a loan you've ever refinanced?"

[mokmay]

We bought our home with lender A in 2017.  We refinanced the loan with lender A in 2020.  Lender A sold the refinanced loan to lender B in 2020 before we ever made a payment on it. 

We received THREE 1098-t forms for 2020. 

The first is from Lender A and covers the original loan/payments up to the refinance date.

The second is from Lender A and only contains the interest paid for the few days between the refinance closing and when the new loan payments began.

The third is from Lender B and covers all payments made on the new loan after the refinance date.

I'm not sure how to answer these following two questions for each of the 1098-t forms because the wording is confusing me.  Specifically when it refers to a loan being refinanced...is it talking about a loan that was the result of a refinance? Or the original loan that got refinanced?  Thanks so much.

Q1: Was this loan paid off or refinanced with a different lender in 2020?

Q2: Is this loan a home equity line of credit or a loan you've ever refinanced?

1)Yes, this is a loan I've refinanced or a home equity line of credit (HELOC). Learn more
2)No, this is the original loan I used to buy or build my home.

This is how I was thinking of answering them...please correct as needed!

First form

Q1 Yes (got refinanced...technically not with a different lender though)

Q2 No (original loan)

Second form

Q1 No

Q2 Yes (refinanced)???

Third form

Q1 No

Q2 Yes (still the refinanced loan)???

[KrisD15]

For Lender A, add the interest together, use the beginning balance for the first (older) 1098 and the ending balance from the second (newer) 1098.

1. YES

2. NO

Next enter the third (but you'll only enter 2 total) 

1.NO

2.YES

If you want to enter all three, 

Yes, No

YES YES 

No, Yes

You have to indicate that the first AND second were sold or refinanced or the program will add the loan balance and make your mortgage balance higher than it was. That could limit the interest. 

I would combine the two from the same lender since it was just a few day to make it easier so the balances (on those two 1098 forms) are only entered once and the program won't add them together. You should do what's easiest for you. The result will be the same. If you paid points on the second 1098 from Lender A, you could enter that amount on Box 6 of the last 1098. Points on a refinance are pro-rated over the life of the loan. 

[mokmay]

Very clear answer, thank you!  No points so that part is easy.