Does this include the amount used to payoff previous debt on the house?

So, if my cash out refinance was $100K total, I owed $50K on 1st mortgage and $25K on HELOC (some money of which used for qualified improvements and other money used for other things). I received $25K cash. $10K was used to pay off other debts, pay for college, etc. and $15K was used for remodeling. How much do I enter when asked how much of the loan was used to build, remodel, or repair the property? Do I enter $15K, $90K, or $50K + the amount on the HELOC used for improvements?

149

Expert Alumni

Mar 19, 2023 9:43:03 AM

You will enter the amount that was actually used towards the home ($100k minus 10K cash for other debts minus HELOC amount that was used for other things). Since you used part of this loan to pay for things other than the home, you cannot deduct the interest from that amount of the loan.

Please see Can I deduct my mortgage interest? for additional information.

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Does this include the amount used to payoff previous debt on the house?