Hi folks,
No I have not received any support from Intuit. This still appears to be an unpatched issue, and it's not clear if there is a fix forthcoming.
Here's what I ended up doing based on my best reading. These are Google Sheets formulas, should also work in Excel. The numbers are made up for the sake of the example.
For this example there are 3 lenders. The house was originally financed by Bank 2 and Bank 3 with initial loan amounts of $1,000,000 and $510,000. The loans were then quickly re-financed to Bank 1 for a total of $1,510,000. During 2019 the hypothetical person paid down $20,000 in principal.
| | A | B | C | D | E | F | G | H | I |
| 1 | Lender | 1098 Int | Loan SOY | Loan EOY | Loan AVG | FED MULTIPLIER** | CA MULTIPLIER*** | FED MAX | CA MAX |
| 2 | Bank 1 | $20,000 | 1,510,000 | 1,490,000 | 1,500,000 | =IF(E2<750000,1,750000/E2) | =IF(E2<1000000,1,1000000/E2) | =F2*B2 | =G2*B2 |
| 3 | Bank 2 | $5,000 | 1,510,000* | 1,510,000* | 1,510,000 | | | | |
| 4 | Bank 3 | $3,000 | 1,510,000* | 1,510,000* | 1,510,000 | | | | |
Notes:
*Since the loans from Bank 2 and Bank 3 represent one property, I combined their amounts to show what I believe is the true loan total. Otherwise smaller individual loans can fall below the Federal and State limits, which would make their 1098 interest fully deductible, which I don't believe is the intention.
** This is a value <= 1.0. For loans <= 750,000 this value is exactly 1.0, so the full 1098 interest is deductible.
For a $1,500,000, the multiplier is 0.5.
*** This is a value <= 1.0. For loans <= 1,000,000 this value is exactly 1.0. For larger loans it is < 1.0.
The final two columns represent the total maximum deductible values for Federal and for California. The first amount can be entered into the Federal return as the adjusted total (which is smaller than the sum of the 1098 interest across all forms). For California, I believe you can adjust for the difference between Federal and California maxima, i.e. this is the extra interest that could have been deducted if the federal limit were the same as California's.
<y two cents. Sure would be nice to get an official blessing/debunking of this idea. 😃
