I had 1098s for two mortgages in 2019, the second paying off the first.
So basically, you refinanced a property in 2019. If you refinanced for more than the outstanding balance on the original loan, then the cash out amount (in excess of the original loan balance) may not be deductible if you did not use the cash out to repair or substantially improve the property securing the loan.
Example:
Original loan balance of $50K. You refinanced the property for $80K. Then $50K of that was used to pay off the original loan leaving you with $30K cash in hand. You did not use that $30K in any way for the property that was refinanced. Therefore you can only claim on the SCH A the interest on the original outstanding loan balance of $50K, which is 84% of the interest on the new loan. The amount of interest you can deduct on that loan will remain at 84% for the life of that new loan.
