1098 HELOC question

Forum|Forum|6 years ago
March 18, 2020
2 replies
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I received a 1098 for our now-closed HELOC (as of Sept 2019), but Box 2, Outstanding mortgage principal, was $0. TurboTax isn't letting it be $0 or even $.01. I contacted my bank like I was advised, and they said it is correct because as of 12/31/19, the balance was $0. HELP!

TurboTax Online

ReginaM

Enter your outstanding mortgage principal as of January 1, 2019. According to the 1098 instructions, Box 2, is supposed to be your outstanding mortgage principal on January 1, 2019. Please see the IRS Instructions for 1098 for more information.

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mateosbabyAuthor

The bank said it's supposed to be the amount as of 12/31/2019. I feel caught in the middle. I don't have access to old statements since the account is now closed, so I'm not really sure what to do.

mateosbabyAuthor

I did email them again, purposely to send them the link with the instructions for how to fill out the 1098. We'll see what they say.

hhchamiii

I have a HELOC which had zero balance at both beginning and end of the year, but not in the middle. So we paid some interest. Turbotax won't accept 0 as the balance, so I can't enter this form. Please advise!

ToddL99

The solution is to enter "$1" as the beginning year loan balance and "$1" as the year-end loan balance. This won't have any effect on your tax calculations or your ability to efile.

From an economic perspective, it accurately reflects that you owed the same amount (virtually nothing) at both the beginning and the end of the year. It will, however, let the program know that you didn't forget to report at least some level of debt that would account for an interest expense deduction.