Moneylender Forums

Why is the principal balance in Box 2 wrong on the 1098 forms that Moneylender is generating?

It's not! The balance is at the start of the calendar year on the form, not at the end of the year. Here's what it says in the IRS instructions for Box 2:

Enter the amount of outstanding principal on the mortgage as of January 1, of the current year. If you originated the mortgage in the current year, enter the mortgage principal as of the date of origination. If you acquired the mortgage in the current year, enter the outstanding mortgage principal as of the date of acquisition.

Moneylender reports the balance at the beginning of the day on January 1st in box 2 for existing loans, and reports the opening balance as indicated for newly created or purchased loans.

I agree that this can be confusing when comparing the 1098 form with the current loan balance. Box 2 is based on the outstanding principal at the beginning of the year, not the balance at the end of the year. The reporting date used for the form is important, and checking the IRS instructions helps explain why the amount may look different from a later statement.