topic Cash Out Refi in Get your taxes done using TurboTax

Cash Out Refi

chapinreyes — Fri, 19 Mar 2021 14:20:28 GMT

We completed a cash out refi on a rental home in Texas and took money out to put down towards a new home in California. But this means this is an additional loan that we have to pay back to the bank anyway. Would the money we took out be considered income? Is there a time limit of how long we have before it can be considered income?

Re: Cash Out Refi

ToddL99 — Sun, 21 Mar 2021 21:47:40 GMT

No, cash-out proceeds from a refinance are not considered "income" - it is just money you borrowed and have to pay back.

(Since the cash you borrowed is not taxable income, you cannot claim a deduction when you pay it back)

Re: Cash Out Refi

chapinreyes — Tue, 23 Mar 2021 17:16:54 GMT

Thank you!