Question

Mortgage lender sells loan - should I report it as payoff in TurboTax

Forum|Forum|5 years ago
February 5, 2021
2 replies
0 views

I purchased a second home where I used the builder's mortgage company. I paid a 1% discount point to buydown the interest rate which was approximately $4,000. I settled on May 8, 2020 and the mortgage company sold the loan to Wells Fargo on May 17, 2020 (9 days later). When I try to report the discount point in Turbotax, it asks me on whether I payed off the original loan with the builder or not. How do I report this?

TurboTax Deluxe Online

O

Opus 17

Employee

No, the fact that your loan was "sold" or transferred to another lender or investor is not the same as paying off the loan.

V

vcedwards

I had the same question. TurboTax is asking for the value of the loan as of January 1, 2021. Do I show the full value of the loan on that date for both the original lender and the current lender? It won't let me show a zero for the value of the loan taken from the original lender.

B

bradley3

No, this situation is not a refinanced loan. In past years (Thru 2021) Turbo Tax has not adequately provided a way to report multiple loans that are merely sold from one servicer to another. For tax year 2021, I had to combine the two1098's to get the right answer. In 2022, our loan was sold twice! I have three 1098's for the same loan. I am hesitant to use Turbo Tax this year because of their lack of competence in clearly addressing and correcting this situation. Does anyone know if Turbo Tax fixed this problem?

R

RobertB4444

TurboTax will prompt you if you are entering multiple 1098s with "Is this the most recent 1098 you have received?" You need to organize the 1098s by the order in which your loan was sold and then you can enter them one at a time answering 'yes' to that question only for the lender that had your loan at the end of the year. Then you can enter multiple 1098s for the same loan.

@bradley3

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