I have a similar situation as the OP except it's my primary residence and I refinanced twice in 2021. I originally tried filling out Table1 from IRS pub 936 but I think line 12 (or 11) is where I got lost (if you can tell me what figures I should be putting on those two lines, it would be a great bonus).
Anyhow, my mortgage principle balance (from the loan originally used to purchase the home in 2011) was $200,000 when I did a $500,000 cash-out refi in January 2021. I put the $300k excess funds into a savings account.
In May 2021 my principle balance was $490,000 and I did another cash-out refi for $505,000. Again, the excess funds (~$15k) were put into a savings account.
1) Can I deduct the full interest amount paid in 2021 from my original loan?
2) Do I, additionally, deduct 40% of the interest I paid in 2021 on the 1st refi ($200k/$500k)?
3) How do I calculate my % deduction for the 2021 interest on the last refi of $505,000?
4) Do I use the same % deduction (from question #3) for the interest I pay on the $505,000 loan for future years?
Thanks in advance
Thanks in a
