I have reviewed the 2023 file. A couple of questions:
Was the largest-balance loan a refinance of a loan originated in 2016?
Were any of the proceeds of that loan used for anything other than building or improving that home?
Refinanced grandfathered debt.
If you refinanced grandfathered debt after October 13, 1987, for an amount that wasn't more than the mortgage principal left on the debt, then you still treat it as grandfathered debt. To the extent the new debt is more than that mortgage principal, it is treated as home acquisition debt (so long as the proceeds were used to buy, build, or substantially improve the home), and the mortgage is a mixed-use mortgage (discussed later under Average Mortgage Balance in the Table 1 Instructions). The debt must be secured by the qualified home.
You treat grandfathered debt that was refinanced after October 13, 1987, as grandfathered debt only for the term left on the debt that was refinanced. After that, you treat it as home acquisition debt to the extent that it was used to buy, build, or substantially improve the home.
The 2023 return doesn't have the error that was in the 2022 returns where the "No" box was automatically checked in the Tax & Interest Deduction Worksheet for "Does your mortgage interest need to be limited". Instead, the interest was not limited based on the answers to the questions in the interview.
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