The challenge in turbotax is how to change from the easystep inputs without messing other things up. The other issue is that if you override any calculated value, it prevents electronic filing, so I avoid overriding any calculated value. The last issue is that many cells you cannot find where they are calculated from.
So the first thing I tried was to use easystep. That gave the wrong answer and filled out the interest expense worksheet incorrectly. The next thing I tried was to go to the interest expense worksheet and that fill out. That resulted in what was a simple calculation as you stated above and turning it into a wrong answer. I then tried to enter the correct mortgage interest into Sch A and it required me to override the calculation from the interest worksheet and that prevents electronic filing. I then realized that the 1098 forms are not included in the efile, so I deleted them from turbotax, deleted the interest worksheet and then turbotax allowed me to directly enter the interest in Sch A without overriding any calculated value as well as entering the equity interest in Sch E. I thought that was a solution. But then, when I went into the state return, since there was no 1098 entered into turbotax and no interest worksheet, the state was not correct. That is where I am now.
I will try next to put the 1098s back in, the interest worksheet back in, get the wrong answer but see where the info propagates to the CA return and manually try to fix all. Urgh....
