Turbo Tax Home and Business has a bug in it as it does not calculate the 1098 Mortgage interest deduction in Schedule D properly when you have a refi loan. It limits the interest considerably. I have 3 1098 forms to enter (1 from the loan that is getting refi', 1 from the Refi company, 1 from the bank the refi was transferred to). BTW the original loan bank and the bank the refi was transferred to are the same bank. Therefore 2 of the 1098's are from the same bank. When will this get fixed in Turbo tax.
Please Try this.
Don't see line 8a on 1098
If there is a refi and there was an outstanding mortgage principal listed in both of them on Line 2 on the 1098. When you do put an outstanding balance in both forms, then the program adds them together and if that number is greater than $750k, then it puts you in the category to "limit interest". To get that to go away, you need to go back to the deductions section and click on "edit" mortgage interest statement. Change the line 2 of the mortgage that you no longer owe on (like the one that you refinanced and paid off) to a 0 (zero) because you have refinanced out of that loan and no longer have an "outstanding mortgage principal". Once you change one of them to zero (the one that was paid off by the refinance) then it should no longer pop up with that error at the end when you go to file.
Also the Federal Gov gets a copy of the 1098, If you put 0 in box 2 you will not match the 1098 sent to the government. This is a bug still and Intuit needs to fix it.
One more thing is on the next screen Turbo tax asks you if "This loan was paid off or refinanced with a different lender in 2020." I checked this box so turbo tax should know not to include this loan amount in Box 2 in the $750K limit. Therefore the bug is in the SW. I should not change the 1098.
I found the same issue, has there a fix to this issue? Thanks!
Enter the original 1098 for the original loan. Enter the Current loan balance on that 1098. Enter the remaining two with $1 as the loan balance for each and record all other information as listed on the form. This is the workaround for this that will reflect the correct information to report.
DaveF,
I trust you have reported the issue to TurboTax development.