Yes. When you refinance a loan, it is possible to take cash out. So, if you take cash out, every year after that you will need to calculate how much of the interest is for the part of the loan that was used to buy, build or substantially improve the home that secures the loan versus how much was not. So, this is the reason for it. If you did not use any of the loan refinance for anything else, then how you answer in 2024 will not have an affect on your return or the interest that you can deduct.
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