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Multiple 1098s for an original loan, an equity loan and a refinance loan that rolled the other 2 loans into a single one

Forum|Forum|5 years ago
April 8, 2021
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We had a main mortgage loan for the house, and a second mortgage as well. In 2020 we refinanced and paid off both loans with the money from the refinance. All 3 loans are from Navy Federal. I'm following the steps for entering multiple 1098s, but step 5 is confusing to me. I've copied/pasted the steps below from the TurboTax instructions.

1. Gather all of your 1098 forms related to your refinance, e.g. the form from your original lender and the form from your new lender.
(I've gathered the 1098s for all 3 loans)

2. Grab a calculator and add the Mortgage Interest Received (Box 1) amount from each form and enter the total in TurboTax as Box 1 Mortgage interest.
(I added the amounts from the original loan, equity loan, and refinance loan for this)

3. Add the box 5 Mortgage Insurance Premium from each form and enter the total as Box 5 Mortgage insurance premiums. (If you weren't required to pay mortgage insurance premiums, these boxes will be blank on your forms and you won't enter anything here.)
(I added the amounts from the original loan, equity loan, and refinance loan for this)

4. Add the property tax paid from each form and enter it here next to Property (real estate) taxes paid.
(I added the amounts from the original loan, and refinance loan for this. There's no property tax on the equity loan)

5. Enter the remaining items from the 1098 loan that was paid off in 2020 for the Outstanding Mortgage Principal (Box 2), Mortgage Origination Date (Box 3), and the checkbox on box 7 (address of property securing the mortgage)
(The wording of step 5 is confusing to me. I think it's asking me to use the numbers and origin date from the new refinance loan, but I'm not certain. Is it asking me to enter the info from the new refinance loan?
If it's asking me to add the numbers for the original loan and the equity loan, then which origin date would I enter? Would I enter the origin date from the original loan or would I enter the origin date of the equity loan, or would I need to do this some other way?

TurboTax Home & Biz Windows

Best answer by AmyC

Worksheets are not tax forms and can be frustrating! The goal is for the program to know if you had more than $750,000 in mortgage. If so, would you be grandfathered in for the $1,000,000.

If your mortgage is below $750,000, only enter the amount of your new loan for the balance and the dates won't matter. You can use the newest information.

If above $750,000, use your original loan date to see if you qualify to be grandfathered in .

You got all the big steps above it done right, and mortgage below $750,000, no worries!

AmyCAnswer

Employee

Worksheets are not tax forms and can be frustrating! The goal is for the program to know if you had more than $750,000 in mortgage. If so, would you be grandfathered in for the $1,000,000.

If your mortgage is below $750,000, only enter the amount of your new loan for the balance and the dates won't matter. You can use the newest information.

If above $750,000, use your original loan date to see if you qualify to be grandfathered in .

You got all the big steps above it done right, and mortgage below $750,000, no worries!

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T

tearlach99Author

Thanks, a heap, Amy!

Your answer got me through that point! I have a follow-up question. TurboTax is now asking me if I pulled cash out of the refinance loan. Since the money from 2nd mortgage loan (which was rolled into the refinance loan) was not used for home improvements, is the amount of the 2nd mortgage loan considered as cash out? For example, if my second mortgage loan was for $27,000.00, does the IRS view that amount as cash taken out of the total refinance in order to pay for the 2nd mortgage?