Question

Multiple 1098s due to loan transfer and primary sale

Forum|Forum|4 years ago
April 19, 2022
1 reply
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During 2021, I sold my previous primary residence (Prop-A) and acquired a new primary residence (Prop-B). I had a mortgage on Prop-A that was transferred in 2021 (about two months before selling the home). As a result, I received two 1098s for Prop-A. The Prop-A mortgage was under the 750K limit and I owned it for 4 months of 2021. I additionally received a 1098 for Prop-B, which exceeded the 750K limit and was owned as my primary residence for the remaining 8 months of 2021. In total 3 1098s.

To complicate things further (I think, maybe not), the mortgage on Prop-A was refinanced in 2020 and as a result is not the "original loan used to buy the property" as asked in the interview questions in 2021.

How do I go about entering the 3 1098s and how do I ensure that I am able to take a deduction for Prop-B mortgage interest (albeit a reduced amount as it exceeds the 750K limit).

Mortgage Interest

R

RaifH

Enter all three 1098s as secured by your main home. Answer No to Let's see if this is the most recent form for this loan for the two loans on your old home. Answer Yes only for the outstanding loan on the new home. This will make TurboTax calculate the deductible interest limit using only the outstanding mortgage principal on your new home.

You are correct, answer No to the is this the original loan question for both 1098s on the old home. If you did not do a cash-out refinance or it's not a home equity line of credit, it will not impact the calculation.