Sold/bought house - mortgage sold twice

[TonyH]

We sold our home in August and subsequently bought a new home.  We have the original mortgage 1098 from the first home, the second 1098 from the first mortgage company, and now a third 1098 from a company the second mortgage was sold too.  The questions asked by TT are:

1) Where it asks about points there are 4 boxes that could be chosen (new loan on which I paid points, I bought or improved my main home with this loan, I'm spreading out points, or I have no points) what should I choose for each of the mortgages?

2) Two questions later it asks, Is this the original loan you took out to purchase this property?  How should I answer that one for each mortgage?

It seems like I can answer exactly the same for each one.  Would appreciate any clarifications.

Best,

TonyH

[JulieS]

You have to think about each mortgage individually. 

Your first mortgage is the one that was on the house that you sold.

Did you pay points on that mortgage during 2019? If you did it should show on the 1098-INT form. In most cases, you either don't pay points on an existing loan, or you deducted them in the year the loan started. If that is the case, you choose, We've already deducted all the points we paid in 20XX, or we didn't pay any points.

Later, when you get to the second question, you answer that it is the original loan, unless you refinanced your old home during the time you owned it.

The second and third mortgages may have points paid, because both loans started in 2019. If you paid points on the first mortgage for your new home, it will show on the 1098-INT or your closing statement.

You should choose either, We paid points when we purchased or refinanced to improve our main home in 2019. or, We didn't pay points, depending on whether you paid points. 

Later, when you get to the second question, you answer that it is the original loan.

The third mortgage should not have any points paid on it, but if it shows on your 1098-INT, go ahead and report that amount.

Later, when you get to the second question, you answer that it is the original loan. Even though it is a different mortgage lender, if you did not refinance the loan, to you it is still the original loan. 

[Ungers2010]

I have done that, but it won’t let me claim my interest becasue it is adding the two mortgage balances (double counting) and putting me over the $750,000 limit.  How do I make in uderstand there is only one loan?

[AmyC]

Check your dates on the loans. Review your answers again. The program works.

I made up an example  for outstanding mortgage. I used $1.6 million grandfathered debt.

I used bank 1 as an existing mortgage. Enter it, box 2 outstanding mortgage balance entered, pre-2019 date for loan.

Then I entered bank 2 as a refinance.so it has a mortgage origination date in 2019. I marked this is a new loan, secured by my property. Is this the original loan to purchase the property? No, this is refinanced loan. Have you used the money exclusively on this home, yes. I even said that I pulled money for use on the house.

Bank 3 -bought out bank 2 - same mortgage principal or slightly less than bank 2 and origination date after bank 2 - when it was taken over. No points, secured by my property. Loan I refinanced, No to cash pulled.

My worksheet shows that I am getting all 3 mortgages and it shows on schedule A. 

If you can not get it to work, you may need to  contact a specialist that can work through that section of the return with you. 

@Ungers2010