Hi,
I refinanced our condo in 2020 under a different lender. I found this guidance to combine the 1098s from the original (Citibank) and new (Chase) lenders. But when I add a lender, which name do I use - original or new?
Thanks,
Roland
I recommend you use the new lenders name. This would be the lender at the end of tax year 2020 and the name will carry over in TurboTax to 2021.
What if I have more than two 1098s?
You should combine all of the 1098s directly related to the refinance and enter it as one 1098. An example of this is if you refinanced two loans into one loan. Any 1098s not directly related to the refinance should get entered separately.
I'm seeing a lot of articles on this subject and the TT instructions are a bit confusing/conflicting. So I should use the name of the new lender for my refinance but combine the amounts for Box 1 mortgage interest and property taxes paid, and for the rest of the items, enter the amounts from the original 1098 and not the refinanced 1098?
If you've refinanced or had your mortgage lender changed, the outstanding mortgage principal listed in the combined total of them on Line 2 of the 1098 will be too large.
When you 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. Enter both 1098's.
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".