Forced to enter a outstanding mortgage principal for HELOC when there is non

Forum|Forum|5 years ago
January 23, 2021
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Working on my 2020 taxes. We had a HELOC on our house that we sold last year. The HELOC balance both when the HELOC was originally opened and at the beginning of the year was zero. That is also the number on form 1098. In between we used the HELOC to patch the house up before we sold it and obviously the HELOC was paid off at closing. Turbo tax will not accept a zero outstanding balance. It will accept 1 but that is not correct. Sounds like something in the program that needs to be fixed.

Best answer by ToddL99

There are times when the program requires an entry other than "0", even when "0" is the appropriate value for that field. Using "$1" in these cases will not affect on any tax calculation or your ability to efile, but it will "tell" the program that you have made an entry required to support a deduction or credit.

In this case, entering "$1" for both the beginning year loan balance and the year-end loan balance lets the program know that you didn't forget to report at least some level of debt that would account for an interest expense deduction.

From an economic perspective, it accurately reflects that you owed the same amount (virtually nothing) at both the beginning and the end of the year.

T

ToddL99Answer

There are times when the program requires an entry other than "0", even when "0" is the appropriate value for that field. Using "$1" in these cases will not affect on any tax calculation or your ability to efile, but it will "tell" the program that you have made an entry required to support a deduction or credit.

In this case, entering "$1" for both the beginning year loan balance and the year-end loan balance lets the program know that you didn't forget to report at least some level of debt that would account for an interest expense deduction.

From an economic perspective, it accurately reflects that you owed the same amount (virtually nothing) at both the beginning and the end of the year.

D

dghemmesAuthor

Employee

Your answer was definitely correct. I did not like the fact that the data I put in the program does not match the form the bank (I think) sends to the IRS. But the program did allow me to overwrite the $1 with a zero once I went to the actual form.