In 2021 I refinanced my primary residence, paying off a $90k outstanding mortgage with a $170k new mortgage at a lower interest rate. The $80k "cash-out" was used for closing costs and a new roof, with the remaining balance sitting in a designated bank account until a structural repair and a remodel are completed in 2022 and 2023. These expenditures will cost more than the $80k that was "cashed-out". To date, none of that money has been spent on anything, house related or not. Turbo Tax asks "Tell us how you've used this loan.". After I enter the amount spent on the roof, Turbo Tax's next screen asks if I'm done with entering 1098 and mortgage loan information and goes to the next topic. What is the proper tax treatment for this situation, with regard to deducting mortgage interest, and where in the TurboTax file can I go to see that it's been treated correctly? Thanks for your help.
