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How can you fix a wrong qualified loan limit for a refinanced loan?

Forum|Forum|3 years ago
April 3, 2023
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My mortgage loan was originally acquired in 2014. I refinanced it in 2021. I believe that the qualified loan limit for it is $1,000,000 since it was originally acquired before 2017. In TurboTax, however, a $750,000 limit is applied. How can I fix the problem?

TurboTax Premier Online

Best answer by AmyC

The concern is the balance of the mortgage that was paid off. Provided your balance was over $750,000 before refinance, you should not have the $750,000 limitation. You were smart to notice.

Pub 936 states:

Refinanced home acquisition debt. Any secured debt you use to refinance home acquisition debt is treated as home acquisition debt. However, the new debt will qualify as home acquisition debt only up to the amount of the balance of the old mortgage principal just before the refinancing. Any additional debt not used to buy, build, or substantially improve a qualified home isn't home acquisition debt.

Here is the key - the Sch A only lists your deductible mortgage interest. All the worksheets are behind the scenes with your dates and amounts. They do not go to the IRS, they are checkpoints to ensure the accuracy of your return. If you are confident that you know the correct numbers, you only need to enter the correct amount and use the earlier date for the program to know the limitations.

Follow these steps to your 1098. When the program asks for the mortgage origination date, use 2014. Select it is the most recent form, since it is. Continue answering questions HELOC, exclusive use, etc. Then view your forms again and verify against pub 936 that you have the correct deduction for your situation.

C

Cynthiad66

It depends. Have you e-filed already? If so, then you can amend the return. If you have not e-filed yet you can return to the return to the mortgage interest interview questions then answer the refinance question with the correct dates. That should correct it.

If you plan to amend, please wait until the original return has been fully processed by the IRS meaning you receive your refund or balance due notice. Then amend if necessary. Here is how to amend.

If you used TurboTax Online, simply log in to your account and select “Amend a return that was filed and accepted.” If you used our CD/download product, sign back into your return and select “Amend a filed return.” You must file a separate Form 1040-X for each tax return you are amending.

To make the correction now just go back into your federal return then go to Deductions and Credits then select Mortgage Interest then edit.

If you need further assistance, please return to this forum.

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C

cheolhopAuthor

I have not filed it yet.

Could you teach me which question I can provide with the correct date? And how I can navigate to the question?