Fixed rate second tax deduction

[jxz1]

Hello community,

I took out a fixed rate second on my home in 2019. The money was deposited in my bank account and I paid interest on the money, but I did not use the money. Am I able to deduct the interest paid?

If in 2020 I use a small portion of the money to make a purchase that does not "buy, build, or improve my home" am I able to deduct the interest pain on the remaining, unused amount?

Am I able to repay the small portion used above and "start over" at the full amount to improve my home and be able to claim the full amount as a deduction?

As an example:

Let's say I took out $20000 out through a fixed rate second mortgage and this money was put in the bank. Interest is paid on this money. I did not use any of the money in 2019.

In 2020, I used $4000 to buy an inexpensive car in a pinch. Through other means, this money was quickly repaid putting the funds available back to $20000. 

How much interest can I deduct for 2019? 2020? 

Or does the deduction only apply to interest on money actually spent?

Most of the discussion I see involves a HELOC which is a different situation as that is similar to a credit card.

I have searched everywhere but cannot find an answer to my specific scenario.

About to file but am getting hung up on this one issue.

Thank you!

[Anonymous]

since the loan in 2019 wasn't used for anything it would be persoanl so no 2019 deduction.

the portion that is used to buy, build or improve the home will qualify starting with the month the money is actually used for that purpose 

[jxz1]

Thank you that makes sense.

I guess my confusion is how to properly classify the loan(s) in TurboTax Deluxe. Is there a help topic on this specific scenario? I have not been able to find anything specifically for second mortgages, only for HELOCs.

In summary, here is my situation:

Took out a fixed rate second mortgage in May 2019, paid $750 in fees.

Rates dropped significantly and refinanced this loan in July 2019, paid another $750 in fees.

There have been delays in remodeling the home so funds remain unused.

In Jan 2020 I used a small amount to help purchase a vehicle. Funds borrowed for vehicle were repaid.

More delays in remodeling because of the virus situation so funds remain unused.

Once I do start using the funds (over time, not all at once), how do I indicate in TurboTax the amount of money used for home improvement (interest is tax deductible) vs what is unused (interest on this portion not tax deductible)?