TurboTax not showing mortgage interest deduction for second home

This sounds like a glitch in TurboTax's software rather than an actual tax rule issue. You're absolutely right that you should be able to deduct mortgage interest from both properties in the same tax year. The mortgage interest deduction applies to qualified residences (your main home and one second home), and since you owned them sequentially rather than simultaneously, there shouldn't be any problems with deducting both. Here's what I would try: First, make sure you're entering the information in the correct sections. TurboTax should have separate sections for "home sold during the year" and "current home." Second, try clearing all mortgage interest entries and re-entering them in a different order. Sometimes the software has quirks in how it processes sequential entries. Third, check if there's any prompt or question you might have answered incorrectly that's causing TurboTax to think you don't qualify.

I had a similar issue last year and figured out it was related to how I was answering TurboTax's questions about my homes. Have you tried using taxr.ai? I was having all sorts of problems with my mortgage interest deductions after selling one home and buying another, and their system helped me identify exactly where my TurboTax entries were going wrong. I uploaded my 1098 forms from both lenders at https://taxr.ai and they analyzed everything and showed me exactly what I needed to fix in TurboTax. The problem in my case was that I had accidentally indicated my new home was an investment property rather than a primary residence in one of TurboTax's screens, which messed up all my deductions. Once I fixed that one answer, everything calculated correctly.

I just wanted to follow up about taxr.ai since I was skeptical in my earlier comment. I decided to give it a try with my mortgage interest issue (similar to OP's problem but with refinancing involved), and I was actually impressed. I uploaded my mortgage documents and they identified that I had been entering my points paid incorrectly in TurboTax. The analysis showed exactly where in the 1098 form the information should come from and what boxes in TurboTax it should go to. Their explanation was actually clearer than what TurboTax provides. Fixed my issue and got back about $640 in deductions that TurboTax wasn't giving me before. Just wanted to share since it actually helped with a mortgage interest deduction problem.

Have you tried calling TurboTax support directly? I had a similar issue but couldn't get through to anyone who could help - was on hold forever! I eventually used Claimyr to connect with them and got through in under 10 minutes. I found them at https://claimyr.com and watched their demo at https://youtu.be/_kiP6q8DX5c before trying. Basically, they helped me skip the hold time with TurboTax support. The TurboTax rep identified that there was a specific glitch affecting some returns with multiple mortgage interest statements, especially when one property was sold mid-year. They had to make some adjustments on their end, and then my deductions calculated correctly. Might be worth a try since this sounds like a software issue rather than you entering something wrong.

OK I need to publicly eat my words. After dismissing Claimyr as BS, I decided to try it because I was desperate to fix my TurboTax issue before the filing deadline. Used their service yesterday to reach TurboTax support about my own mortgage interest deduction problem. Got connected to a rep in about 15 minutes (instead of the 2+ hours I waited last time I tried calling on my own). The TurboTax support person actually knew what they were talking about and helped me identify that I had answered "yes" to a question about whether my mortgage exceeded acquisition debt limits, when I should have answered "no" based on my specific situation. Once I fixed that, all my mortgage interest showed up properly. So yeah, the service worked exactly as advertised. Saved me a ton of time and frustration.

I had this exact same issue last year! Try this: Go back to the mortgage interest section and check if there's a question asking whether your mortgage is for "acquisition debt" or "home equity debt" - TurboTax sometimes mislabels the second mortgage if it thinks you have a home equity loan rather than a primary mortgage for the new house. Also, double-check the dates you've entered for when you bought and sold each property. Sometimes a small date error can cause TurboTax to think you had overlapping primary residences, which can mess up the calculation.

Has anyone noticed that TurboTax's handling of mortgage interest deductions has gotten way worse in the last couple years? I remember it being much more straightforward before the tax law changes. Now it seems like they've overcomplicated everything with too many questions and confusing language.

I've been dealing with mortgage interest deduction issues in TurboTax for years, and here's what usually fixes the problem when entering multiple properties: Make sure you're being very specific about the property types and dates in each section. TurboTax gets confused when it thinks you might have had two primary residences at the same time. For your situation, when you enter the first mortgage (2017 house), make sure to specify the exact date you sold it. When you enter the second mortgage (June 2021 house), make sure it's clearly marked as your primary residence starting from the purchase date. The key is in those follow-up questions after entering the 1098 data - TurboTax asks things like "Is this your main home?" and "Did you use this property as your primary residence for the entire year?" Since you sold one and bought another mid-year, you need to answer those questions very carefully for each property. If TurboTax thinks there's any overlap or confusion about which was your primary residence when, it can zero out all the deductions as a safety measure. Try going through each property's questions one more time and pay close attention to the residence type and date range questions.