Thanks for your response and it helped a little. However, the basic problem is that the California Return is treating the refinance as a separate mortgage because there are two separate Loan numbers and two separate 1098 Forms for the original loan and the refinanced loan. I had to override the California worksheet by treating them as one loan instead of two separate loans. I wish the program would ask whether the property was refinanced and then ask for the beginning balance on the old loan, the date of refinance, and the ending balance on the refinanced loan. It would then correctly calculate the mortgage interest deduction.
