But two complications arise when entering two separate forms for a refi.
First, on the fed form the average balance is calculated as the SUM of the two average balances, as though the loans were both in effect the entire year, rather than as the AVERAGE of the two (or a prorated sum depending on the refi date). That's odd, but doesn't really cause a problem since each loan is over the $1m cap (the orig loan was Jun 2017, so both use the higher cap--no cash taken out).
Second, and more problematic, when the mistaken overall average carries over to the California form, the deduction limit is calculated using the mistaken average as denominator, so I get only about half the credit I should. Since the CA cap is the same as the Fed cap for these loans, the two should have the same deduction. But TT thinks otherwise.
The obvious override is simply to enter a pretend 1098 that combines the two loans and their interest payments, since that way the average is the orig loan's Jan 1 balance plus the refi loan's Dec 31 balance divided by two, and that then carries over correctly to the California form. Or I can just override the miscalculated figures individually.
I'm hoping that the handling of refis will get corrected before filing time.
Please suggest how to proceed?
