Sold and Purchased New Primary Home and Mortgage Sold

[UFNavy06]

I sold my primary residence as I was relocating for my career mid 2024.  I received a 1098 for that house from the mortgage servicing company.  

I closed on my new residence on October 20th and on October 30th, it was sold to a new servicing company, which happened to be the same company I had for my previous mortgage.  I received two 1098s for this mortgage, one from the original servicer and one from the current servicer.

TurboTax is telling me that my mortgage interest deduction may be limited.  

I combined the two 1098 for my current residence to simplify that portion.  However, I think it's trying to include the now closed mortgage (zero balance) from my previous residence to bring me over the $750,000 limit.  Neither mortgage is above that limit on its own.  How can I rectify this?  Should I be adding the mortgages together and dividing by .5?  That would still be well below the $750,000 threshold.

[KrisD15]

When entering the oldest 1098, when going though that interview, be sure to select Main Home, "This loan was PAID OFF or refinanced with a different lender in 2024" and "Yes" for most recent loan, Neither HELOC nor refinance, used only on that home.

Enter the second 1098 (in your case you are combining) 

Primary home,  None of the above, 2024 Origination Date in Box 3 of the 1098, Yes, secured, Yes, most recent, neither HELOC nor refinance, Yes, used only for home.

Continue through interview, enter 2024 date for newer loan

Enter a 2024 end date for loan one on the "We need a bit more information" screen

You will eventually get to the screen that shows the program is limiting the interest. 

TurboTax does not support averaging mortgage balances. 

If the loan balance never exceeded the limit on any one day in 2024, adjust the amount here.