New tax law on refi's

Forum|Forum|6 years ago
February 3, 2020
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I have refinanced my original loan from 2003 more than once. I have taken out cash at least once but it would take a great deal of work to find records of what the money was spent on. Advice?

Refinancing

Opus 17

Employee

If you are audited, and cannot prove how much of your current mortgage is acquisition debt and how much is equity debt, the IRS will deny the mortgage interest deduction. You could claim all your interest, or none of it, or make a guess, but if you are audited you will have to do the work or take the loss.

You should be keeping financial records related to your house for as long as you own the house plus at least seven years after you sell. If you don’t have accurate figures on what you spent for home improvements, you won’t be able to calculate your correct capital gains when you sell.

NCPERSON1

if it helps any, you don't need to find ALL the records of what the money was used for, you only need to find the records that document the money that was used to improve your house. the rest isn't deductible in any event.