Thank you. But it would not be the proceeds but the portion of the cashout that is used for home improvements? Part of the cash out is used for home upkeep (eg painting) and future improvements.
Reviewing the worksheet calculation, Turbotax only uses the amount in that line (ie valid proceeds) to prorate the total interest paid during the year. It does not prorate based on (refinanced loan + valid proceeds) as it should.
Example:
Mortgage Amount: 300K
Loan Payoff: 200K
Cashout: 100K. (40K improvements + 60K maintenance + future improvements)
if you only input the 40K it will only use this portion of 13% (40/300) to prorate the interest (13%*interest paid). It should use 240/300 or 80%.
