Deductions & credits

I believe @DavidD66 is most generally correct, but its complicated.

First, you must remember that the 3 rules you quote from are preceded by a qualifier: "A mortgage secured by a qualified home may be treated as home acquisition debt, even if you don't actually use the proceeds to buy, build, or substantially improve the home."  This is designed to capture a situation where, for example, a homeowner pays for an improvement from their savings, then has a financial crisis and decides to refinance to have the cash back.  The rules consider a "what-if scenario": What if the homeowner had left their savings alone, refinanced to pay for the improvements, and saved the cash in the bank to use for the emergency.  The rules you quote set time limits on the ability to treat the refinanced proceeds as if they were used to pay for the improvement. 

Here, the taxpayer will use the proceeds to pay for the improvement, but at a later date.

Second, the actual law is silent on any time limits.  The law is at 26 USC § 163(h)(3).

Remember that Congress passes the law, then the IRS writes regulations to implement the law, then they write publications to explain the regulations.  If there is any disagreement between the publications, regulations and law, the law controls.  In this case, the IRS seems to have written some rules to interpret the difference between acquisition debt and equity debt that was created in the 1987 law but not further defined. 

So we have a situation where the money is borrowed in January and used to pay for an improvement in July.  (This is not necessarily even unusual, a big renovation can take months, and you might pay 1/3 in advance, 1/3 on start and 1/3 on completion, or an even more spread out milestone payments.  It can't be that on a 6 month remodeling job, the 1/3 deposit is qualified debt but the 2/3 paid later is not.  The only difference here is that the taxpayer is planning on a delay, rather than having one forced on him or her by the contractor.)

Since the law is silent on the issue, and the regulations discuss a 24 month rule connected to other situations but not this one, applying a 24 rule here is reasonable** and the money would be treatable as acquisition debt if the refinance occurred in January and the money was set aside and used for construction in July (or within 24 months probably.)  However, you would want to be very careful about not using the money in the mean time.  I think if you invested the money in the stock market for 23 months, then pulled it out to pay for an improvement, you might be in real hot water.  Then you would be dealing with the situation where "A mortgage secured by a qualified home may be treated as home acquisition debt, even if you don't actually use the proceeds to buy, build, or substantially improve the home" and the special rules would definitely apply. 

One point of note is that interest paid from January until July is NOT qualified acquisition debt and not deductible, even if the money is later used to pay for an improvement (the interest becomes deductible after the improvement is paid for but not before.  Turbotax won't help you with this calculation, you have to keep track yourself.

And of course, when in doubt, pay for professional tax advice.

**Even more generally, tax courts use concepts like connection, reasonableness, and substance over form (what really happened rather than how you made it look).  If the loan is clearly connected to the work, it is likely to pass if audited.  Such as, you refinance the house, and put half the proceeds in a savings account while you get estimates, then use the savings to pay for the improvement.  There is a clear connection between loan and improvement, and the court is not likely to object to a reasonable time period to get estimates, hire the contractor, and get on their schedule.  On the other hand, if you refinance, use all the money to pay off credit cards, then 6 months from now use a credit card to add a deck on your house and decide you want to get a deduction after all, you've lost that definite connection between loan and use, and your interest deduction would be on shakier ground.