Bandit124
Returning Member

Get your taxes done using TurboTax

I am experiencing the same problem on my 2020 CA return as described in the post by Dorothy on 31 Mar 19.  For the "Amortized points allow. in 2020" line in Part 1 of the CA Deductible Home Mortgage Interest Worksheet, TurboTax appears to pull from Line 10d on the Federal Home Interest Worksheet  worksheet, which is the amortized points allowable for 2020 as calculated for a loan not paid off in 2020.  However, for the case of a refinanced loan, all remaining amortized points are allowed in the year refinanced.  The Federal Home Interest Worksheet correctly reflects this in Line 10e.  The CA worksheet appears to treat this correctly only for the case where the points deduction was not allowed on the Federal return due to the proceeds not being used to purchase, build, or improve the home secured by the loan.  It does not appear to treat correctly the case where all remaining points are deductible in the year the loan is paid off.  My return has 3 Form 1098s that highlight where TT is correct and where incorrect.  Form 1098 #1 - Mortgage refinanced in 2020.  Points allowable = $63.  Points deducted = $843 due to deducting all remaining points.  TT incorrectly calculates $-780 for 540 CA addition.  Form 1098 #2 - Existing refinance on a separate property where funds not used to used to purchase, build, or improve the home secured by the loan.  Points allowable = $244.  Points deducted = $0 due to Federal disallowance.  TT correctly calculates $244 for 540 CA addition.  Form 1098 #3 - The mortgage used to refinance #1 in 2020.  Points allowable = $185.  Points deducted = $185.  TT correctly calculates $0 for 540 CA addition.  Overriding the $63 with $843 for Form 1098 #1 on the "Amortized points allow. in 2020" line in Part 1 of the CA Deductible Home Mortgage Interest Worksheet appears to produce the correct addition on the 540 CA but I have not yet convinced myself that it has caused no harm elsewhere.