https://ttlc.intuit.com/community/tax-credits-deductions/discussion/i-refinanced-my-home-in-2012-at-that-time-i-took-out-cash-for-buying-non-home-related-items-will/01/462788#M59123 Tue, 04 Jun 2019 23:37:03 GMT hollerjess1947 2019-06-04T23:37:03Z https://ttlc.intuit.com/community/tax-credits-deductions/discussion/i-refinanced-my-home-in-2012-at-that-time-i-took-out-cash-for-buying-non-home-related-items-will/01/462788#M59123 Tue, 04 Jun 2019 23:37:03 GMT https://ttlc.intuit.com/community/tax-credits-deductions/discussion/i-refinanced-my-home-in-2012-at-that-time-i-took-out-cash-for-buying-non-home-related-items-will/01/462788#M59123 hollerjess1947 2019-06-04T23:37:03Z https://ttlc.intuit.com/community/tax-credits-deductions/discussion/yes-you-can-deduct-interest-you-pay-on-any-mortgage-no/01/462820#M59129 <P>Yes.</P><P> <SPAN>You can deduct interest you pay on any mortgage, no matter the legal format, up to the amount of <B>acquisition debt</B>.</SPAN> </P><P>Acquisition debt is debt used to buy, build, or substantially improve your home.</P><P>For example: You buy a home for $100,000 in 2009 with an $80,000 mortgage.&nbsp; In 2017, your mortgage balance is paid down to $65,000.&nbsp; You refinance for $125,000 and use $10,000 to remodel the kitchen.&nbsp; Your acquisition debt is (65K+10K) = $75,000, so you can deduct 75/125th or 60% of your interest.</P><P>It doesn't matter if you got a new refinanced mortgage for $125,000, or if you kept the original mortgage and took out an HELOC for $50,000.&nbsp; Either way, you now have $125,000 of total debt, of which $75,000 is acquisition debt and $50,000 is equity debt.</P><P>You can figure your total interest deduction by looking at each month individually or by using the first month/last month method.&nbsp; In the above example, in January 2018, you have $75,000 of acquisition debt and $125,000 of total debt, so the deductible percentage is 60%.&nbsp; You can assume you pay off equity debt first, so in December 2018 you have $75,000 of acquisition debt and $115,000 of total debt, so your percentage of acquisition debt is 65.2%. Averaged together, your deductible interest for the year is 62.6%.<BR /></P><P> </P><P>Turbotax will ask questions to do this&nbsp;calculation&nbsp;</P> Tue, 04 Jun 2019 23:37:06 GMT https://ttlc.intuit.com/community/tax-credits-deductions/discussion/yes-you-can-deduct-interest-you-pay-on-any-mortgage-no/01/462820#M59129 Opus 17 2019-06-04T23:37:06Z