It's not that hard to figure really. Using my example above, only 60% of the first refi was acquistion debt. That percentage will never change for the life of the loan. Yes, I know it "could" change. But in this case I've not been provided any information to indicate even the possibility of a change. Therefore, not included in my example.
You refi the loan again. The outstanding balance on that 1st refi is $80K of which only 60%, or $48,000 is what remains of the acquisition debt.
So only the interest on $48K of the 2nd refi is acquisition debt. If that 2nd refi is for $100K, then only 48%, or $48K is acquisition debt. Therefore, only 48% of the interest paid on the loan each year for the life of the loan, is a SCH A deduction.
