There seems to be an error in the 1098 logic for a primary residence. I am entering a refinanced loan (done in 2020) of a 2014 mortgage (with no cash out) and when specifying that this is a refinance of a previous loan (with no cash out), TT then asks "when did you buy the home with the loan of (my lender)." If I use the date for the refi, all seems to be well, but the deduction is limited to the $750k mortgage interest cap rather than the 1m cap. If I specify the original purchase date (7/2014) as the current loan origination date, the mortgage deduction disappears altogether... However, if I choose the option that "my name is not first on the 1098," the logic does other wonky things, like putting a negative number on "mortgage not included in 1098" on my schedule A. Any suggestions?
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The issue has been resolved. Please update your software and revisit the Mortgage Interest section.
Enter the original purchase date (7/2014) and continue. After answering yes to the question in the image below and entering the outstanding loan balance, you should see the deductible amount of mortgage interest.
Refinanced home acquisition debt.
Any secured debt you use to refinance home acquisition debt is treated as home acquisition debt. However, the new debt will qualify as home acquisition debt only up to the amount of the balance of the old mortgage principal just before the refinancing. Any additional debt not used to buy, build, or substantially improve a qualified home isn't home acquisition debt. irs.gov
Others are having the same issue:
The issue has been resolved. Please update your software and revisit the Mortgage Interest section.
Enter the original purchase date (7/2014) and continue. After answering yes to the question in the image below and entering the outstanding loan balance, you should see the deductible amount of mortgage interest.
Refinanced home acquisition debt.
Any secured debt you use to refinance home acquisition debt is treated as home acquisition debt. However, the new debt will qualify as home acquisition debt only up to the amount of the balance of the old mortgage principal just before the refinancing. Any additional debt not used to buy, build, or substantially improve a qualified home isn't home acquisition debt. irs.gov
This now appears to work correctly. Thank you for addressing. I am worried that previous years did not calculate correctly and I will need to go back and review. It might be worthwhile to update the question on TT that asks "When did you buy the home with the loan from Lender XYZ?" as that doesn't make sense if the loan is a refi...
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