December Refinance, Missing 1098

[Columbinho]

Hi everyone, hoping for a sanity check on something my lender told me.

The Situation:

• Closed on Refinance: 12/19/2025 (Originator: Bank B)

• Prepaid Interest at Closing: ~$1,400 (covering 12/19 – 12/31/25).

• Loan Sold: Transferred to Bank C in mid-January 2026.

• First Montly Payment Due: Feb 1, 2026.

The Issue: I asked Bank B (the originator) for my 2025 Form 1098 since the prepaid interest (~$1,400) is well over the $600 reporting threshold.

They explicitly told me: "No 1098 will be issued for 2025. The prepaid interest will appear on your 2026 statement from Bank C."

My Questions:

1. Is this correct? Since the interest was physically paid/collected at closing in 2025, shouldn't it be deductible on my 2025 return? It seems wrong to deduct 2025 prepaid interest on a 2026 return.

2. How do I handle this in TurboTax? If the bank refuses to issue the form, can I just use the amount listed on my Closing Disclosure (Section F) and enter it as "Interest not reported on a 1098"?

I want to take the deduction this year (2025) but want to make sure I won't get flagged if the lender doesn't report it to the IRS until next year.

Thank you! I appreciate the help!

[AmyC]

1. A cash basis taxpayer will deduct expenses in the year paid. You have the closing statement as proof of the expenditure. Although, if it is over $600, the bank should have issued a 1098.

2. In the program, under deductions and credits follow these steps:

1. Select mortgage interest and property taxes
2. Did you get a 1098, answer no
3. Lender's name, answer your bank or closing statement
4. Amount, enter your amount paid
5. EIN or tax id, it may be on the closing statement or you have to ask google.

Caution - the points paid will be spread over the life of the loan and is not deductible. Only the prepaid interest is deductible here.