How to enter points on a mortgage that was sold to another lender

[bengoldberg]

I purchased my home in 2022 and paid points to the original lender. That loan was then sold to a different servicer in 2023. I spreading the points over the life of the loan (amortizing). So do I just enter the points I paid to the original lender and say I paid no points to the new lender? What about next year when I don't have a 1098 from the original lender. Where/how will I continue to amortize the points?

Thanks!

Ben

[MonikaK1]

When a loan is sold to another lender, it’s not the same as a refinance, but you’ll still need to enter each 1098 separately.

Enter the original (sold) loan first

1. Sign in to TurboTax and select Pick up where you left off or Review/Edit under Deductions & Credits.
2. Select Show more next to Your Home and Start or Revisit next to Mortgage Interest and Refinancing (Form 1098).
3. Answer Did you pay any home loans in 2023? and Continue.
4. You can either sign in to your financial institution and import your 1098 forms, or select Change how I enter my form.
5. Next, you can either upload a digital copy or Type it in myself.
6. Continue through and be sure to enter this 1098 exactly as it appears.
7. Answer the questions, and when you get to the Let's see if this is the most recent form for this loan screen, answer No to Is the 1098 you're working on now the most recent for your loan?.
8. On the next Let's get some details about this loan screen, answer Yes to Is this the original loan you used to buy your property?
9. Select Continue to be taken back to the Your 1098 info so far screen.

Then enter the 1098 for the new loan

1. On the Your 1098 info so far screen, select Add another 1098 and continue through to either import or enter your information manually.
2. Answer the questions accordingly and complete your 1098 info exactly as it appears on your form.
3. On the Let's see if this is the most recent form for this loan screen, answer Yes to Is the 1098 you're working on now the most recent for your loan?
4. On the next Let's get some details about this loan screen, answer Yes to Is this the original loan you used to buy your property? Even though the loan is with a new lender, it's still considered the original loan for this calculation.
5. When you're all done, you'll see both your forms on the Your 1098 info so far screen. You can Continue through to finish and file your return.

If you paid points when you obtained the loan, no matter if it's the original loan or a refinance, you can get a deduction. Generally, this deduction is taken over the life of your loan. But, when you get a new loan, the points you are amortizing from the old loan can be deducted in full. You can also begin amortizing any new points you paid when you refinanced.

See this TurboTax help article for more information.