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CA Mortgage Interest Adjustment

Forum|Forum|6 years ago
February 29, 2020
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How do I calculate this amount so I can get out of the CA return review?

Best answer by KrisD15

If the interest was limited on the Federal return because your acquisition debt was over the 750,000 Federal limit, you would add to the California state the amount of interest that was disallowed up to a 1,000,000 debt limit.

California also allows for up to 100,000 equity debt, so if the federal interest was limited because you took cash out, that interest can also be added back (up to 100,000 cash out)

You should have gotten to a screen that asked “Do any of these situations apply to you?” . That screen would have the total available.

Subtract what was allowed (on your schedule A) from the total available. Also add back in any disallowed because of cash-out loans.

You may also add up the interest you reported from your 1098(s) and subtract what was allowed on your federal Schedule A. The difference is what you can add to your CA return as long as your home mortgage debt is not over 1,000,000 and any equity loans are not over 100,000.

KrisD15Answer

If the interest was limited on the Federal return because your acquisition debt was over the 750,000 Federal limit, you would add to the California state the amount of interest that was disallowed up to a 1,000,000 debt limit.

California also allows for up to 100,000 equity debt, so if the federal interest was limited because you took cash out, that interest can also be added back (up to 100,000 cash out)

You should have gotten to a screen that asked “Do any of these situations apply to you?” . That screen would have the total available.

Subtract what was allowed (on your schedule A) from the total available. Also add back in any disallowed because of cash-out loans.

You may also add up the interest you reported from your 1098(s) and subtract what was allowed on your federal Schedule A. The difference is what you can add to your CA return as long as your home mortgage debt is not over 1,000,000 and any equity loans are not over 100,000.

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B

Bluheavn1

If I took out a $393,000 mortgage in 2016 and refinanced $384,000 in 2020, what is the amount of Qualified Loan Limit that should be reflected on Deductible Home Mortgage Interest Worksheet Part 2 and Part 3 Line 9 ?

KrisD15

If the refinance did not take out any cash (you simply rolled one loan over to another) enter 0 as the ending balance for the first loan/1098.

There would be no limit to the amount of interest that would qualify as Home Mortgage Interest.

If you did take out cash, and if the cash was not used to improve the property, that percentage would not be deductible.

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M

Michael168

I having difficult getting out of ca home mortgage interest deduction.turbo tax put 1007 pulled over from federal . How do I calculate ca home mortgage interest deduction. I had two mortgages in 2021 first one was original one for 101296 and refinance was 104500

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mglauner

The state of California does not conform to the new federal law that limits taxpayers to the interest on $750,000 ($375,000 for married filing separate) of home mortgage acquisition debt.

California allows taxpayers to deduct interest on loans up to $1,000,000 ($500,000 for married filing separate).

The loans originated on or after December 15th 2017 don't need adjustment.

Click this link for more detailed info on California Home Mortgage Interest Deduction.

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whodiini

I figured out how to take the CA increased interest deduction for home non-acquisition debt and it works. The problem is I do not know how to adjust my CA sch E mortgage interest deduction to account for the above.

For example, suppose my federal sch E says I have $1000 of home acquisition debt interest and $200 of non-acquistion debt interest that I use as a rental property in Sch E, Now in my CA state return, I can deduct $1000 + some fraction of non-acquisition debt that turbotax calculates. Say it is $100 of the $200, so I deduct $1100 as personal mortgage debt. Now I need to reduce in my Sch E the interest listed as $200 to $100. I cannot figure out how to do this. I do not want to override because I cannot efile. I double click the CA Sch E cells and nothing happens. It would seem there is a place in the line of mortgage interest, column (c) personal allocation to enter -100, but entry is not allowed. Anyone know how to do this? Thanks