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Nocateeyachtclub
February 8, 2022
Question

How do you handle loan payoff for mortgage interest deduction when you sold one house and bought another, and paid interest on both loans in the tax year?

  • February 8, 2022
  • 1 reply
  • 0 views
I have entered the 1098 information from each lender but am now being asked about mortgage balance on January 1, 2022.  One mortage was paid under the construct of the sale of the home.

1 reply

AliciaP1
AliciaP1
February 8, 2022

You should input the mortgage balance from the 1098 for the new home only. Your 1098 reports the "Outstanding Mortgage Principle" in box 2 as of 12/31.  Since there are no transactions on a holiday (1/1), you enter this amount for the mortgage balance for your return.

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