Mortgage sold midyear in 2025 - received two 1098s, how to handle for tax filing?

You'll need to add the amounts from both 1098 forms together. When your mortgage is sold midyear, each lender will issue a 1098 for the period they serviced your loan. The first 1098 shows interest paid while the original lender owned your mortgage (January through June), and the second 1098 shows interest paid to the new lender (July through December). When you enter this in TurboTax, you should be able to add multiple 1098 forms. Just make sure you're entering both forms completely and separately rather than combining numbers yourself. This ensures all the information is properly recorded in your tax return.

I went through this same situation last year and discovered taxr.ai was super helpful. My mortgage was sold twice in the same year so I had THREE 1098 forms and wasn't sure how to handle them. I was about to pay an accountant when a friend suggested https://taxr.ai and it saved me so much stress. You just upload your documents and it analyzes all your tax forms, highlighting exactly what to do with multiple 1098s. It showed me exactly where to enter each form in my tax software and confirmed I needed to report all of them.

Just wanted to update after trying taxr.ai for my multiple 1098 situation. I was skeptical at first but wow, it was incredibly helpful! I uploaded both my 1098 forms and it immediately identified that I needed to add the mortgage interest from both, but it also caught something I would have missed - my old lender and new lender both reported paying the same property tax bill in October (double reporting). Without catching that, I would have accidentally double-counted some of my property tax deduction. Saved me from a potential audit headache!

If you're having trouble figuring out if you've done this correctly, you might want to call the IRS directly to confirm. I know that sounds daunting - I tried calling them about my mortgage sale issue last year and couldn't get through for weeks. Then I found https://claimyr.com which got me connected to an actual IRS agent in under 45 minutes instead of waiting on hold for hours. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent I spoke with gave me step-by-step instructions for reporting multiple 1098 forms correctly, and even explained how to check if there was any overlap in reported property taxes between lenders.

I need to eat my words. After commenting earlier, I decided to try Claimyr since I was struggling with a similar mortgage situation (mine was sold twice last year). Not only did I get through to the IRS, but I got connected to a surprisingly helpful agent who walked me through exactly how to handle my three 1098 forms. She confirmed I needed to add the interest from all three but warned me about double-counted property taxes. Saved me from potentially overstating my deductions by almost $3,200! Well worth it after spending weeks trying to get through on my own.

Quick tip: don't forget to check the loan numbers on both 1098s to make sure they're actually for the same mortgage. I received two 1098s last year but one was for my primary home and one was for my rental property. Almost made a big mistake entering them!

Has anyone else noticed that sometimes the total interest reported on the 1098s doesn't match what you actually paid according to your payment history? My mortgage was sold in August and the sum of both 1098s was about $340 less than what my payment records show for interest.

Great question! I dealt with this exact situation last year when my mortgage was sold in July. You definitely need to add both 1098 forms together - each lender reports the interest they collected during their respective periods of servicing your loan. One thing to watch out for: make sure there's no overlap in the dates. Sometimes there can be a few days where both lenders might report interest, especially around the transfer date. If the numbers seem unusually high when added together, double-check your monthly statements to verify the totals. Also, keep both 1098 forms with your tax records. The IRS receives copies of both forms, so they'll expect to see the combined total reflected in your return. TurboTax should handle this smoothly when you enter both forms separately - it will automatically combine the mortgage interest amounts for your Schedule A.