the old house was purchased in Apr 2017, sold in Nov 2022.
the loan refinanced to one lender in July 2021, then sold to another lender in Auguest 2021, but got it back in Mar 2022. From origination date it is overlapped.
on one 1098:
box 1 is $4k, box 2 is $940k, box 3 origination date is 8/4/2021, box 11 acquisition date is 1/3/2022.
another 1098: with 3 months loan outstanding.
box 1 is $20k, box 2 is $930k, box 3 origination date is 7/30/2021, box 11 acquisition date is 3/4/2022.
with 11 months loan outstanding.
for new house 1098 form:
box 1 $20k, box 2 $2.1M, box 3 8/4/2022.
with 5 months loan outstanding
When I enter the 3 1098 forms in turbotax, it shows 3 loans in schedule A duductible home mortgage interest worksheet, the average balance for 1st is $93.5k, 2nd just shows the mortgage amount and no beginng balance or end balance so no average balance; for 3nd, shows $2.07M, then when calculate the total average balance it shows, $93.5 + $2.07M.
should it calculate according to the months loan outstanding? like 93.5k x 11/12 + 2.07M x 5/12?
@xishuilianzi8 where are you getting $93,000 from?
1) take the total interest and divide it by the interest rate - THAT is the average loan balance.
that is an acceptable method per the IRS - see page 12 - bottom left
be very careful with your results. While the mortgage on the original home was not subject to interest limitation - because it was less than $1,000,000 and you borrowed prior to 12/2017, the interest on the new mortgage is limited to the interest on the first $750,000 of debt. look at the worksheet on page 11.
I assume you did not cash out refinance on the mortgage related to the home now sold.
the turbotax just sum the beginning balance and ending balance and then divided by 2 to get the average balance. That is why I ask question here. I think for my case, I should calculate monthly balance, add them together and then divided by 12. I wanted to know how to do this by using turbotax?
if using "Interest paid divided by interest rate method.", should I calculate 3 then add them up?
4,000/0.0375 + 20,000/0.0375 + 21,000/0.04
again, how can I type the average balance in turbotax? It semms only calculate by itself by using 1098 forms.
Thank you for your reply, I am using download software premier, there is no place to type balance other than 1098.
Is that a problem? I need to switch the product?
could you please point it out where can I find it?
when I add a lender, I can only type lender name, then select primary home, then question about if has name on 1098 or if no 1098, next page will be 1098 information, then few questions about points/if most recent 1098/refinance or not/use the loan for other use or not, that is it.
after input all 1098 forms, just ask the when did the home purchased for each loan.
Next page will be outstanding balance on 1/1/2023 for each. if paid off type the paid off balance and date.
last page is the calculation.
where to input the average balance?
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