Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
cancel
Showing results for 
Search instead for 
Did you mean: 
RZDZ
Level 1

CA Mortgage Interest Adjustment

How do I calculate this amount so I can get out of the CA return review?

1 Best answer

Accepted Solutions
KrisD15
Expert Alumni

CA Mortgage Interest Adjustment

If the interest was limited on the Federal return because your acquisition debt was over the 750,000 Federal limit, you would add to the California state the amount of interest that was disallowed up to a 1,000,000 debt limit. 

California also allows for up to 100,000 equity debt, so if the federal interest was limited because you took cash out, that interest can also be added back (up to 100,000 cash out) 

You should have gotten to a screen that asked “Do any of these situations apply to you?” . That screen would have the total available. 

Subtract what was allowed (on your schedule A) from the total available. Also add back in any disallowed because of cash-out loans. 

 

You may also add up the interest you reported from your 1098(s) and subtract what was allowed on your federal Schedule A. The difference is what you can add to your CA return as long as your home mortgage debt is not over 1,000,000 and any equity loans are not over 100,000.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

11 Replies
KrisD15
Expert Alumni

CA Mortgage Interest Adjustment

If the interest was limited on the Federal return because your acquisition debt was over the 750,000 Federal limit, you would add to the California state the amount of interest that was disallowed up to a 1,000,000 debt limit. 

California also allows for up to 100,000 equity debt, so if the federal interest was limited because you took cash out, that interest can also be added back (up to 100,000 cash out) 

You should have gotten to a screen that asked “Do any of these situations apply to you?” . That screen would have the total available. 

Subtract what was allowed (on your schedule A) from the total available. Also add back in any disallowed because of cash-out loans. 

 

You may also add up the interest you reported from your 1098(s) and subtract what was allowed on your federal Schedule A. The difference is what you can add to your CA return as long as your home mortgage debt is not over 1,000,000 and any equity loans are not over 100,000.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

Caseyblue
Level 3

CA Mortgage Interest Adjustment

If I took out a $393,000 mortgage in 2016 and refinanced $384,000 in 2020, what is the amount of Qualified Loan Limit that should be reflected on Deductible Home Mortgage Interest Worksheet Part 2 and Part 3 Line 9 ?

KrisD15
Expert Alumni

CA Mortgage Interest Adjustment

If the refinance did not take out any cash (you simply rolled one loan over to another) enter 0 as the ending balance for the first loan/1098. 

There would be no limit to the amount of interest that would qualify as Home Mortgage Interest. 

 

If you did take out cash, and if the cash was not used to improve the property, that percentage would not be deductible. 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
SK250
Level 3

CA Mortgage Interest Adjustment

Hello,

 

In 2021 Premier version, I see CA Mortgage Interest Adjustment (under section :

Here's the income that California handles differentlyshows  -1524. My original loan was 740K starting from Dec 2018 (when I bought my first home).  Outstanding loan I have is 718K when I refinanced in OCT,2020. I never crossed 750K limit. Not sure why is it showing negative value here? Federal calculations are fine. I believe the value -1524 should be -1.
 
Would you please help?

 

psav8tor
Level 1

CA Mortgage Interest Adjustment

I too am having the same issue my CA mort adj shows -$2,328.

Why is turbotax calculating a negative number for Californians?

psav8tor
Level 1

CA Mortgage Interest Adjustment

I think I figured it out. Went into forms view and the box for Home Equity Line of Credit was checked, instead of new loan. Once unelected turbotax showed a positive number which was my 1040 mort. inst. claimed interest less max allowance. 

randsom
Returning Member

CA Mortgage Interest Adjustment

It won't allow me to put in $0 on the old loan balance amount......

DaveF1006
Expert Alumni

CA Mortgage Interest Adjustment

Try putting in $1 and see if that will clear.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
Caseyblue
Level 3

CA Mortgage Interest Adjustment

What are the effects of not paying back within 3yrs?

DMarkM1
Expert Alumni

CA Mortgage Interest Adjustment

@Caseyblue you may need to clarify your question.  This thread is about an adjustment to the mortgage interest deduction for CA due to CA not conforming to the Federal tax law on mortgage loan caps.  

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
randsom
Returning Member

CA Mortgage Interest Adjustment

I just ended up removing the negative number and put a $0 in the mortgage adjustment area in my California return.  It's too confusing to try and "play" with the two 1098's to make it work.  TT should be easier, not harder than paying a live preparer.

Dynamic AdsDynamic Ads
Privacy Settings
v