topic Re: Mortgage Deductions in Home loans

Mortgage Deductions

ehm2 — Sun, 07 Mar 2021 23:30:23 GMT

I had 2 refi's last year. For each Turbo Tax is asking "what was the amount you used to build, buy or improve your home." Is this referring to (1) the original loan amount or (2) the amount paid last year (principal + interest) or (3) something else? Thanks in advance for the help.

Re: Mortgage Deductions

Bsch4477 — Sun, 07 Mar 2021 23:50:42 GMT

The program is asking if the refi money was used for anything other than going for the purchase or improvement of the home. Money used for other purposes can’t be included in the deductible interest amount.

Re: Mortgage Deductions

ehm2 — Sun, 07 Mar 2021 23:56:47 GMT

Thank you for your reply. Yes, I know that money for other purposes can't be deducted. So does that mean that TT is asking for the original loan amount minus money used for other non-home related payoffs? It's not clear that TT is asking for that or the year to date amount paid in the final mortgage payment before the loan was paid off by the new refi loan.

Re: Mortgage Deductions

george664 — Sat, 13 Mar 2021 01:18:17 GMT

It would be you final balance on the previous loan.

You'll find the exact amount on your refinance closing or settlement statement. The amount is usually listed under Payoff with the previous lender's name.

That's the amount that carries over as acquisition debt. Interest paid on the acquisition debt is deductible. Interest on the cash out is not deductible.