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Tclaypool42300
January 31, 2020
Question

Mortgage Refinance Interest

  • January 31, 2020
  • 1 reply
  • 0 views

I refinanced my house in March of 2019. Owed $161,000. Borrowed on new loan $195,000. I have 2 1098 forms. First one is for old loan with $1706 mortgage interest. Second one is for new loan with $5,996 interest. Last year's return i paid $6900 interest and it was deducted. This year TT only lets me deduct the $1706. Shouldn't I get a deduction for at least a portion of the $5996? And TT won't doesn't show checkbox to say first loan was paid off in 2019.

    1 reply

    D
    DianeC958
    January 31, 2020

    Yes, you can deduct the full $5,996 you paid in interest on the refinanced loan as long as the additional funds borrowed were used to improve the house.  If the additional money you borrowed was used to pay off other debt or for other personal reasons then part of the interest you paid is not deductible.

     

    Please go back through the mortgage section of TurboTax and review your answers to the questions to verify that you answered them correctly.

     

    Link about Mortgage Refinance Deductions

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      T
      Tclaypool42300Author
      January 31, 2020

      I have went back through several times. I did not use the additional money for my home so I understand I can only get partial. I enter the first loan as Original Loan. I enter second  loan as Taking Cash out. It asks if loan is closed on second loan not first. 

      KrisD15
      KrisD15
      February 4, 2020

      First, delete both 1098's. Do NOT try to edit them.

      Enter the older loan first, enter box 2 as it is reported, 

      THERE WILL BE A SCREEN ASKING "WAS THIS LOAN PAID OFF OR SOLD IN 2019?"  CLICK "YES" 

      (this screen will not appear if you go back and edit)

      Continue through the interview

      Next, enter the second 1098

      Select that it WAS a HELC

       

      You will be prompted to report the cash taken out and how much was used for the home and how much was used for other things 

      TurboTax should make a ratio for claiming the interest. 

      **Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"
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