1) Yes, any interest paid on your original $200,000 mortgage would be deductible.
2) Pretty much, but you don't have to do the math. Enter Form 1098 as it appears and TurboTax will ask if it's a refinance and if you took cash out. Answer Yes to both. Enter the amount of cash you took out that you used to build, improve, or buy the house ($200,000) and select the I paid off this loan box and enter the information.
3) You do not have to calculate it, TurboTax will based on the entries. For the second refinance, you will enter the balance as of January 1, 2022. The home acquisition debt will still be $200,000, which represents the original amount you used to buy the home since none of the refinanced money was used on the home.
4) In future years, the IRS has determined that you pay off the non-deductible home equity debt before reducing the deductible interest. This is a good thing because it means you will still get the same interest deduction until the $300,000 of money you did not use on the home is paid off. Only then will your principal payments start to reduce the deductible mortgage interest. You will continue entering $200,000 as the home acquisition debt (assuming the entry fields don't change much). As your principal is whittled away, the deductible portion of your mortgage is a larger percentage of the total mortgage interest you are paying.
@SamMac
