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March 1, 2021
Question

Should I put original line of credit amount for my 1098 box 2 or have it as it is on the 1098 and leave it as 0?

  • March 1, 2021
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March 1, 2021

If you did not have an outstanding balance on the line of credit as of 12/31/2020, then enter $1 in Box 2 of the 1098 Mortgage Interest interview. 

 

This will not have any effect on your tax calculation and will not generate an error in either TurboTax or with the IRS. From an economic perspective, it is accurate - you owed virtually nothing on this mortgage at the end of 2020. 

  

The program will not accept "0" as an entry in this field. It would not be accurate to enter the original line of credit amount as the "outstanding mortgage principal balance", since you didn't owe anything on 12/31/20. "$1" is not exactly correct, but it is economically equivalent to the correct value of "0".

  

There are many places in TurboTax where you must make a non-zero entry, primarily to let the program know that you answered the question and that the answer makes some sense.  

  

In this case, entering "$1" tells the program that you didn't forget to answer the question and that you had at least some amount of a mortgage loan balance to justify claiming an interest deduction.