Entering info about my Home loan 1098 Form

Forum|Forum|3 years ago
April 18, 2022
1 reply
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I am stuck. Please help clarify these questions:

Is this the original loan you used to buy your property? NO I refinanced this in 2020 Tax year

Is this loan a home equity line of credit (HELOC) NO

Or a refinance of a previous loan? YES I refinanced this in 2020

So my question is do I say yes? Or NO since this is now 2021 Tax year?

Did you take cash out when you got this loan? YES in 2020

Why am I being asked these questions now in 2021 tax year?

TurboTax Deluxe Online

RaifH

You answer Yes to the refinance and Yes to the cash out, even if you did it in 2020. The cash you took out of the home is considered home equity debt, not home acquisition debt if you did not use it to buy, build, or improve the home. Home equity debt is not deductible.

If you took cash out in 2020, the interest you paid on the portion of the mortgage that is considered home equity debt is not deductible in all future years. This remains true until the entire amount of home equity debt is paid off, which happens when your outstanding mortgage principal is less than the amount used to buy, build, or improve the home.