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angieb2281
New Member

Hello, we refinanced our home and Turbotax asks if we "ever took cash out on a refi and what we used it on." Does a small check of $2,000 count as "cash out"?

To add a little more detail, we didn't request any cash, but ended up with a small check after closing due to where all the numbers landed from the refinance. I have no idea what we spent it on.
6 Replies
Carl
Level 15

Hello, we refinanced our home and Turbotax asks if we "ever took cash out on a refi and what we used it on." Does a small check of $2,000 count as "cash out"?

Technically and legally speaking, if you received even $1 at the refi closing, you had a cash out.  If the amount you received was less than 1% of the total refi amount, I wouldn't worry about it.  If more than 1%, but less than 5%, then it would depend on a few factors if I would bother separating it out or not.

What was the total amount of the refi loan as shown on the lender's statement? That is, the total amount the bank loaned you. Not the total amount you owe.

 

fanfare
Level 15

Hello, we refinanced our home and Turbotax asks if we "ever took cash out on a refi and what we used it on." Does a small check of $2,000 count as "cash out"?

you didn't apply for a cash-out refi, so the answer is NO.

Carl
Level 15

Hello, we refinanced our home and Turbotax asks if we "ever took cash out on a refi and what we used it on." Does a small check of $2,000 count as "cash out"?

You didn't apply....

Good point!

 

angieb2281
New Member

Hello, we refinanced our home and Turbotax asks if we "ever took cash out on a refi and what we used it on." Does a small check of $2,000 count as "cash out"?

We received a $2,000 check and the refinance loan amount was $163,000. I selected “yes” to TurboTax asking if I ever took cash out, and “no” to whether it was used toward another property, and it never prompted me further for an amount nor did it make my refund amount change... so hopefully that’s all I needed to do!

ThomasM125
Expert Alumni

Hello, we refinanced our home and Turbotax asks if we "ever took cash out on a refi and what we used it on." Does a small check of $2,000 count as "cash out"?

The issue is if you borrowed money by using your house as collateral, but didn't use the funds borrowed to pay off the prior mortgage or for improvements to the house, then a portion of the loan interest is not tax deductible.

 

It may not have affected your tax because you probably don't use your mortgage interest as a deduction, since you probably take the standard deduction of $24,800 for most married-joint filers. Unless you have enough itemized deductions to get over the $24,800 standard deduction, you do not deduct your mortgage interest on your tax return. 

 

 

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angieb2281
New Member

Hello, we refinanced our home and Turbotax asks if we "ever took cash out on a refi and what we used it on." Does a small check of $2,000 count as "cash out"?

Thank you! That makes perfect sense. And yes, we did take the standard deduction. Thanks again!

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