I refinanced my student loans. My 1098 for the original lender is saying I paid more in interest but I think its because my new lender took over the loan. How do I input?
I refinanced my student loans. My 1098 for the original lender is saying I paid more in interest but I think its because my new lender took over the loan. How do I input?
When a student loan is refinanced or multiple loans are consolidated, all of the capitalized interest is considered paid by the proceeds from the new loan.
Capitalized interest. This is unpaid interest on a student loan that is added by the lender to the outstanding principal balance of the loan. Capitalized interest is treated as interest for tax purposes and is deductible as payments of principal are made on the loan. No deduction for capitalized interest is allowed in a year in which no loan payments were made. Per IRS Pub. 970 Tax Benefits for Education, Chapter 4, page 33.