Question

Mortgage interest deduction

Forum|Forum|1 year ago
March 20, 2025
1 reply
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I have a couple of questions concerning the calculations for the Mortgage interest. I have mortgages on two homes and a HELOC on my primary residence. The first question is about the HELOC. I entered in the starting and ending balances, where the ending balance is greater than the beginning balance as i took money out during the year for work on my house. The worksheet shows the average balance for the year as the starting balance, is this correct.

The second question concerns my second home where the loan servicing company changed during the year and I received 1098 from both. There are two issues. First the worksheet shows the second servicing company data for the beginning and ending balances and the associated average. Seems star age as this is not a new loan, just a change in servicing companies. Why is the average not the starting balance of the first servicing company and the ending balance of the second servicing company.

The second issue is how the interest for the first servicing company. The interest is shown in line 19 of the worksheet and tagged as not subject to limitations. Seems weird as this is not a new loan.

I can track all the data but my concern is how i entered and answered the questions while entering the 1098.

M

mglauner

The 1098's issued are not always correct. You can change your entry of beginning/ending balances to accurately reflect your situation. You want your worksheet to be correct for the Schedule A entry, which is what the IRS sees. Keep any documentation related to changes you make from the 1098's that were issued.

You could keep your HELOC entries as reported for beginning/ending balances. For the change in servicing companies, for the first 1098 use an ending balance of $0. For the second 1098, use the correct beginning/ending balances.

Here's more info on Calculating Average Mortgage Interest (Table 1).

@jorr4sc