Home Interest Deduction

Forum|Forum|3 years ago
April 4, 2022
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I entered my home(s) interest into turbo tax and the deduction is no the amount I entered. I have a main home with the original loan and a refi of that home (same lender). I have a qualified second home (RV) original loan. The interest being deducted is 80% less than what I netered. The value of both is less than $750K. I went back to last years taxes and the same thing happened when I enterd the interest for the original loans for both homes. What am I missing?

Best answer by DaveF1006

This might be because of the manner you reported the 1098's. Try this to see if this works.

For your house loan, report the original 1098 the way that it is recorded, including the mortgage principle balance in Box 2.
For the second 1098, report it the way that it is recorded, except leave Box 2 blank. This is the same loan but we don't want to combine the mortgages, which may have put it over the $750K threshold.
Report the RV 1098 in the manner it is recorded on the form, including the amount in Box 2.
Let me know if this works.

Note: If you took money out of your refinance and did not spend it on your home, you won't be able to claim mortgage interest on that amount that you didn't use for the home. I mention this because this may have been another reason why your mortgage interest was limited.

DaveF1006Answer

This might be because of the manner you reported the 1098's. Try this to see if this works.

For your house loan, report the original 1098 the way that it is recorded, including the mortgage principle balance in Box 2.
For the second 1098, report it the way that it is recorded, except leave Box 2 blank. This is the same loan but we don't want to combine the mortgages, which may have put it over the $750K threshold.
Report the RV 1098 in the manner it is recorded on the form, including the amount in Box 2.
Let me know if this works.

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