1098 Refinance using incorrect deduction thresholds

[Winegum]

TT Home and Business asks under 1098 entry whether this loan was a refinance and if there was cash out.  If you say yes to refi and no to cash out, the program never asks for the original loan date -- it asks what date this loan was used to purchase home (not what the original loan date was).  If you use the refi date from 2020, it bases the interest deduction on the 750k interest threshold rather than the original loan date threshhold of 2014 -- which was interest on loans up to $1m.  If you use the original loan date in place of the refi date (in this case 2014 versus 2020), the program zeros out the interest deduction completely -- both in the program and on Schedule A.  I spent 2 hours on the phone trying to get help and after they opened a case, I got an email saying there wasn't enough information in the case to address the problem.  So infuriating!  Really poor customer service for a real software problem...

[zomboo]

I saw that others are having the same issue as you. Here is the link:

https://ttlc.intuit.com/community/tax-credits-deductions/discussion/mortgage-interest-deductions-on-...

[AmyC]

Since you understand the rules and limitations, I suggest you override the computer with the correct entry. Remember the IRS only gets Sch A with the final number listed. It doesn't get worksheets. The IRS gets the forms from the mortgage company. They are looking for you to claim based on what they receive. 

You can use Table 1 Worksheet to Figure Your Deductible Mortgage Interest.  You have two ways to enter your mortgage information.

• After you enter all Forms 1098, continue on in that section until you see "Your mortgage is being limited." On this page, you can enter your interest calculation. This replaces the program calculation and reports the entry you make here. TurboTax provides this option because of situations like yours.
• Another option, is to enter one form, say the balance is below the limitation, enter dates as needed, enter the correct amount.

@Winegum 

[Winegum]

Hi Amy,

Yes, that was my fallback plan.  However, the problem has now been fixed by TT...  Thanks.  James