@zg2 @JohnB5677 @KrisD15
First, this thread is a disaster. There are so many different issues going on its hard to keep it straight. And even the experts seem to forget there are legitimate reasons for Federal deductible interest to be limited that has nothing to do with $1M or $750K limits but everything to do with the fact that cash out wasn't used for your home but for other things like paying bills or college.
Second, there is definitely something wrong with the CA Deductible Home Mortgage Interest Worksheet (a TT SW defect IMHO) and the biggest issue is that you can't edit it! Where are the circles with the "+" that allow one to override the entry? Next, as many have mentioned it adds the multiple 1098 loan balances together instead of calculating the average. Simply stated an average = sum of all monthly balances/12.
When I do this manually because the worksheet doesn't allow me to edit it, I complete Part 2 and 3 using correct numbers that I have to manually generate I get "1.22" in line 11. ERROR #3 if I'm counting correctly - that field should be limited to a number 1 or less than 1 (you never get to take more deduction than you paid). Doesn't say that anywhere on the form. Achieving at least "1" means I get to deduct all of my CA mortgage interest even though Federal didn't allow it. So, I manually add the difference to Schedule CA, line 8a, column C. Reading the CA 540 instructions several limitations placed on deductions for federal do not apply for CA. Go here to find the form you want and it will be emailed to you (mine came in a few minutes) https://www.ftb.ca.gov/forms/Search/Home
If I hadn't noticed TT error on the worksheet it would have cost me $$$$ in deductions.
One final thought and I hope I am finally ready to file. If you haven't checked your 2018 TT results you may want to do that. I ran 2018 before I start 2019 and found TT had corrected an error that increased my refund by almost $600 and it was related to CA mortgage interest not having been carried onto a form properly last March when I filed. Never thought to rerun last years' SW.
