1098 from lender shows outstanding principal amount of $66,000,000, exceeding the $9,999,999.99 allowed in Box 2. What do I enter for my share of principal balance?

The entry is asking for the amount of debt on your mortgage as of January 1st 2020 (Box 2, Form 1098). If the amount is still greater than what is allowed to be entered into TurboTax for the Form 1098, then you can choose to prepare a paper return, but keep in mind that a Form 1098 does not go with the tax return. Your deduction is entered based on what you are allowed to claim as a mortgage interest deduction.

You can deduct mortgage interest you pay on your rental property. When you refinance a rental property for more than the previous outstanding balance, the portion of the interest allocable to loan proceeds not related to rental use generally can’t be deducted as a rental expense. In other words if you take cash out that is not used on the rental property then you must prorate the interest deduction for only the rental portion.

• IRS Publication 527

If the mortgage interest is for your personal residence review the information below.

• To review the information and worksheets you can use this link: IRS Publication 936, page 12 (you can make the appropriate entries by selecting 'I'll enter it myself'