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Two 1098 Forms & Outstanding Loan Balance

foodster

Hi, my mortgage was sold to another lender during June 2024, and as such I have two 1098 forms for 2024. After I input the information and proceed to the next page, I'm asked to tell more about each of the referenced loans, where it asks what is the "loan balance as of January 1, 2025".

For the first lender section, what do I put as my loan balance as of January 1, 2025? Would I put $0 because it was bought and sold to the second lender? However, if I put $0, I keep getting an error and the page won't let me continue.

Or should I be putting the value that was shown in Box 2 - Outstanding Mortgage Principal in the first lender's 1098? However, that also seems misleading since that was the principal back in June 2024, not necessarily in Jan 2025, because the loan doesn't exist with them anymore…

Lastly, I also assume the purchase date would remain the same for both loans, as that's asking when I purchased my house? and not necessarily when the loan was purchased?

Thanks in advance.

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antone

I’m having this exact same issue. Contacted support but haven’t received a reply. Any luck?

kiarab

Hello,

I’d be happy to help out.

I went through a test account to make sure I provided accurate information. When you get to the page, asking for your loan balance as of January 1, 2025, you can enter a 0 for the first loan since you no longer have a balance with them.

I know you mentioned that you entered a 0 before and are seeing an alert. I just want to verify that you are not just leaving it blank. A 0 needs to be entered into that line. The software may change it to be blank later, so if you are still seeing the error, you can enter a 0 again and you should be able to proceed to the next page. If the error continues, I recommend that you contact customer support so they can see what is going on with your account.

And yes, the purchase date would be the same for both. There currently isn’t a way for the software to know that your second 1098 is for the same home and not a different purchase, so it asks for the date again.

Once you have entered the information in about the two 1098s, you will be asked to confirm your average mortgage balance to determine if the amount of mortgage interest you can deduct is limited. Make sure that when you entered your 1098 that was sold, that you indicated that it was sold to another lender so that the calculation the software provides is accurate (we use the first and last balance method). Otherwise, the software will provide a higher amount for your average balance.

Or if you would like, you can use the Interest paid method found on page 12 of publication 936 and enter that for the Average Balance boxes.

silentastronomer428

I'm having the same issue. i specifically entered zero but it says its missing loan information

MatthewD

https://community.freetaxusa.com/discussion/comment/3985#Comment_3985

Thank you. We are looking into any possible issues on this page.

silentastronomer428

https://community.freetaxusa.com/discussion/comment/3988#Comment_3988

so it lets you move skip past it but when it’s time to actually file it won’t let you move through until you fix the error. Similar to people who receive a w2 with 0 federal income (like for ihss/medicaid waiver payments) if you enter a $1 it lets it go through. I’d recommend updating the software to notate that as a possible fix.

leetax

I'm also having the same issue as described above. Is there a fix being worked on for this? I can get past that Loan Information page by entering 0, but it gets caught in the Alerts and it will not let me file.

KristineS

https://community.freetaxusa.com/discussion/comment/4031#Comment_4031

We are continuing to look into this issue.

leetax

https://community.freetaxusa.com/discussion/comment/4039#Comment_4039

Any answer yet? Is entering 1 to bypass the error an acceptable solution? Or should we wait for a fix?

MatthewD

Hi Leetax,

The software team got this fixed and the fix was implemented in the software on 1/30 in the evening. Anyone who needed this fix can now enter $0 for your Loan balance as of January 1, 2025 and save it without errors. Thank you for bringing this to our attention!