For HELOCs, after entering Form 1098:
- Answer No to Is this the original loan
- Answer Yes to Is this loan a HELOC or a refinance?
- Answer Yes to Did you take cash out?
Answering in this manner will populate the home mortgage interest worksheet correctly. For HELOCs, you must answer in that manner, even if all the money you took out was used to substantially improve the home. If that is the case, you may answer the next question Have you used the money from this loan exclusively on this home? with Yes.
