Question

Why is TurboTax marking our mortgage interest as limited? It isn't and the review section is giving us errors, asking for a limited amount to be entered.

Forum|Forum|5 years ago
January 30, 2021
1 reply
0 views

We have three 1098s from 2020, because we sold a home and bought another home, and the loan we used to purchase our current home was sold off to a different company. Is this why it's marking it as limited? Even if we say that the one loan was closed, it still says our mortgage interest is limited when it should not be.

TurboTax Deluxe Online

L

linaj20201

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Home Mortgage interest limited

Thank You for your patience

For tax years prior to 2018, your mortgage interest deduction is generally limited if all mortgages used to buy, construct, or improve your first home (and second home if applicable) total more than $1 million ($500,000 if you use married filing separately status). Beginning in 2018, this limit is lowered to $750,000. For more information about the mortgage interest deductions, click here: Mortgage Interest deduction

E

EyeMaTurtle

This problem is still not solved! Turbo Tax Premier is still combining my original mortgage balance and refinance balances, thereby limiting the mortgage interest I can deduct. I am unable to fix this manually.

C

Cynthiad66

Please try this.

Don't see line 8a on 1098

If there is a refi and there was an outstanding mortgage principal listed in both of them on Line 2 on the 1098. When you do put an outstanding balance in both forms, then the program adds them together and if that number is greater than $750k, then it puts you in the category to "limit interest". To get that to go away, you need to go back to the deductions section and click on "edit" mortgage interest statement. Change the line 2 of the mortgage that you no longer owe on (like the one that you refinanced and paid off) to a 0 (zero) because you have refinanced out of that loan and no longer have an "outstanding mortgage principal". Once you change one of them to zero (the one that was paid off by the refinance) then it should no longer pop up with that error at the end when you go to file.

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