Thanks for the reply! I followed the steps as advised. However, the federal tax due is still a lot more than not marking the loan as a refinance.
More specifically, when I answer "No" to "Is this loan a home equity line of credit or a refinance of a previous loan", the tax due dropped around $4k. By the way, the outstanding balance is below $750k and I purchased the house before 12/15/2017. I did not take cash out when I refinanced either.
I am actually quite confused about those 2 questions:
- Is this the original loan you used to buy your property? - Answered No
- Is this loan a home equity line of credit or a refinance of a previous loan? - Answered Yes
If someone answered no for the first question then they should always answer yes for the second question, right? It seems I got penalty by answering yes for the second question or I miss-entered/understood something.
