Hello @r8ders99 ,
we are at a loss as to where to go for an answer because the IRS help line is not helping us. We appreciate any help you might be able to provide or where to go to find the answer? 🙂
We built our new home in Black Forest Colorado and have a VA loan for our home which was completed last year (2020) and when the rates dropped dramatically, we refinanced again with the VA. There are very large funding fees involved which can be used as s deduction on our taxes as "mortgage insurance". However, when i go to start our taxes on Turbo Tax they use a previous year calculation that won't allow us to deduct the VA funding fee. When i called Turbo Tax they said that they are waiting for some updates from the IRS.
I did more research and found these publications that in my eyes are not 100% clear. So i reached out directly to the IRS and after going back and forth with my question, they gave this statement-
Note: Please refer to " Qualified mortgage insurance" on page 8 as this is all the information we have available at this time.
that update Turbo tax may be waiting for of 2020- 936 https://www.irs.gov/pub/irs-dft/p936--dft.pdf.
Both of these IRS publications state that "you can treat amounts you paid during 2020 for qualified mortgage insurance as home mortgage interest". Additionally, it states "Qualified mortgage Insurance provided by the Department of Veterans Affairs is commonly known as a funding fee and can be deducted fully in 2020 if the mortgage insurance contract is issued in 2020.
I cannot get the IRS to 100% clarify if the publication(s) truly affect our VA loan deduction. There has been so much in the news over the past few years about helping veterans that i have to wonder if there is a way to be able to deduct it as the publication says and avoid the Limit on Deduction of "If your adjusted gross income on Form 1040 or 1040-SR, line 11, is more than $100,000 ($50,000 if your filing status is married filing separately), the amount of your mortgage insurance premiums that are otherwise deductible is reduced and may be eliminated"
