Kaushal,
Intuit supposedly put me on a "fast-response" list regarding this issue, but (no surprise) I haven't heard anything yet.
But since my first post, I discovered that TurboTax is just following the very confusing IRS Publication. My expectation is still that refis should be treated individually, rather than this weird "average interest" formula, which makes more sense for people with 1st and 2nd homes. I can't believe the intent was to penalize people for refinancing, which the TurboTax calculation does.
Since my wife and I file separately, and she uses an accountant, I referred the issue to them. I'll post an update when I get the expert's analysis.
-Mike
