The IRS has just posted a draft version of Publication 936, Home Mortgage Interest Deduction for tax year 2020.
The publication is dated Nov 23, 2020.
On page 10 it 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 refinancing. ..."
In my case the closing principal on my original 2016 mortgage was $920,188 (as of 11/20/20). My refinanced mortgage was for less, $765,000.
The limit on mortgage interest deduction for loans between1987-2017 was $1,000,000. After 2017, the limit was changed to $750,000. I believe that the $1,000,000 limit still applies to my 2020 loan because it was a refinance of the original loan. Thus all of the interest from both loans should be deductible.
