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Level 1

adjusted mortgage interest

I am trying to calculate the adjusted mortgage interest for a loans that are above 750k using turbotax premier. I have a mortgage for 771k originated 9/2018 and a HELOC originated 9/2018 for 145k both of which I used to purchase and fix my home. I consolidated these two to a larger loan for 921k on 11/2019. My total mortgage interest is added up to be 35k for 2019.

The instructions to calculate the adjusted mortgage interest for loans >750k are very vague (from both turbotax and IRS) and do not take into account a refinance during the same year. How would I go about doing this? Or do I have to seek professional help from a CPA? Thanks

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Level 12

adjusted mortgage interest

take the average balance of all mortgages  over the 12 months - just look for the monthly balance on your servicing statements.  What I mean is for January, get the mortgage balance for each of the two mortgages, that is the January balance (add them together); same thing for each month through Oct.  Then November and December use the balance on the new mortgage as part of the average

 

Take $750, 000/ THAT AVERAGE times the total of all mortgage interest  and THAT is what you can deduct

 

in publication 936 it discusses taking the average mortgage balance (middle column of page 13)

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Highlighted
Level 12

adjusted mortgage interest

take the average balance of all mortgages  over the 12 months - just look for the monthly balance on your servicing statements.  What I mean is for January, get the mortgage balance for each of the two mortgages, that is the January balance (add them together); same thing for each month through Oct.  Then November and December use the balance on the new mortgage as part of the average

 

Take $750, 000/ THAT AVERAGE times the total of all mortgage interest  and THAT is what you can deduct

 

in publication 936 it discusses taking the average mortgage balance (middle column of page 13)

View solution in original post

Highlighted
Level 1

adjusted mortgage interest

thank you this makes a lot of sense!