Enter the older 1098 first and indicate that the loan was paid off.
Enter the newer 1098 .
The interview in TurboTax for Home Mortgage Interest is complicated and "touchy".
The interest, if deductible, will be listed on Schedule A.
Schedule A is only used if you Itemize Deductions rather than take the Standard Deduction.
Most people take the Standard Deduction in which case mortgage interest is not reported.
If you think you will Itemize Deductions, the interest paid is reported, but the individual 1098 is not reported. The 1098 forms are kept with your tax file to show evidence that you had a right to have claimed the interest
With that said, in TurboTax, you could add the interest from both and enter everything as one 1098 or change the date sold to 1/31 so as not to conflict with Box 3 on the second 1098 if TurboTax has trouble with the forms entered as reported.
The program could misinterpret the loan balance if you use the same date for both sale date and purchase date.
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