I am having 2 issues regarding the mortgage interest deduction that I could use some clarification on.
1. We have a mortgage originated in 2016 for over $1,000,000. I understand that the mortgage interest is deductible up to the first $1,000,000 of debt. The TurboTax instructions say to follow the IRS 936 guidelines and enter the adjusted interest, which for us is around 70% of the actual interested we paid. However, when I do so, TurboTax ends up deducting ~70% of the already adjusted value. If I enter in the full amount of interest paid, TurboTax says our deductible interest is around 70% of the full amount, which is what I expect. Is TurboTax performing the adjustment automatically? Are the instructions simply incorrect/misleading?
2. I later encounter a screen for the CA mortgage interest adjustment. Since our loan originated in 2016 (prior to the 2017 transition to a $750,000 limit), we are still subject to the older $1,000,000 limit. As such, I didn't think we would qualify for the mortgage interest adjustment. However, TurboTax says that we are allowed a $3,000 adjustment. Is that correct?
Thanks for any help. Sorry for the long questions.
