mortgage was sold to another lender now I have two 1098

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mcdowelleb
mcdowelleb Member Posts: 1 Newcomer
edited April 1 in Credits/Deductions

my mortgage was sold to another lender and now I have 2 1098, and don't know how to file them. can any help me with this problem?

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  • Taxlady06
    Taxlady06 FreeTaxUSA Agent Posts: 59
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    If you have two 1098 forms, you will enter each one individually in the "Deductions/Credits" section under the "Homeowner Expenses" subheading.

    When you enter your 1098 form(s), you will be asked, "Is this Form 1098 for a mortgage that was refinanced or sold to another lender during 2023?" If you select "Yes" to this question, your mortgage balance will be calculated correctly. Which will not require you to adjust your interest expense if your mortgage amount is below the IRS limitation for 2023. You can deduct home mortgage interest on the first $750,000 ($375,000 if married filing separately) of indebtedness. However, higher limitations ($1 million ($500,000 if married filing separately)) apply if you are deducting mortgage interest from indebtedness incurred before December 16, 2017.

  • LizzyM
    LizzyM Member Posts: 1 Newcomer
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    I also have two 1098 forms for the same mortgage that was sold in 2023, and I am a bit confused by the wording of the note below the checkbox:

    "Is this Form 1098 for a mortgage that was refinanced or sold to another lender during 2023?
    If this Form 1098 is from the mortgage you had on January 1, 2023, answer No."

    Does this mean I only answer Yes on the 1098 from the company that took over the loan, and answer No on the 1098 from the old lender which had the loan in January 1, 2023? Or do I answer Yes for both? Thanks in advance!

  • MatthewD
    MatthewD FreeTaxUSA Team Posts: 247
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    Correct. Answer YES to the 1098 that was sold and No to the one that was not. Basically, we are trying to help the software determine if your average mortgage balance was over $750,000 and your mortgage interest is limited.