Average balance of debt

Forum|Forum|4 years ago
March 27, 2022
1 reply
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Hi,

We sold our secondary home in Feb. 2021(bought prior to 2017), we sold our primary home in May 2021(bought prior to 2017) and then we bought another primary home in Nov. 2021. 2nd home average balance for the 2 months was 651k and our primary home was 315k. We bought our new home for 662k. Turbo tax is saying my average balance for the year is 1628k but we never had more than 966k in any month. It is adding it all together like I had all 3 at once, but I did not. Either Turbotax needs to fix this or tell me how to fix it. Also, my new mortgage was sold to another lender in Dec. so my points from the original lender does not show up in the new mortgage?

DawnC

Please see this Help article - it details how to handle your situation.

Contact TurboTax

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Csmith60Author

Unfortunately this does not address my situation.

JillS56

I am assuming that you are referring to the fact that you have received multiple 1098s and when you enter them it is adding all of the mortgage amounts together and then limiting your mortgage interest deduction. When you have multiple mortgages and are claiming mortgage interest in your situation if you report the information on the 1098s TurboTax adds the amounts together which may lead to a limitation of the deduction because the balance is then overstated. To avoid this, make sure that you're not reporting the same mortgage balance twice. In your case, make sure you are not reporting a balance for the mortgages that have been paid.

Under tax law, you're limited on the amount of home interest you can deduct. The limit is based on the loan amount and date of the origination of debt. We want to make sure we calculate this correctly for you.

If you refinanced last year, you’ll have a Form 1098 from your previous lender and one from the lender you refinanced with. You’ll need both forms.

Follow these steps to enter your mortgage info:

Gather all of your 1098 forms related to your refinance (the form from your original lender and the form from your new lender).
Grab a calculator and add together the box 1 amount from each form. Enter the total in TurboTax as Box 1 Mortgage interest.
Add the Box 5 amount from each form and enter the total as Box 5 Mortgage insurance premiums. (If you weren’t required to pay mortgage insurance, these boxes will be blank on your forms and you won’t enter anything.)
Add the property tax paid from each form and enter it in the Property (real estate) taxes box.

Next, finish adding info for boxes 2, 3, 7, and 11 using Form 1098 for the original loan.

Multiple 1098s