I refinanced my home this year, cashed out to buy another home, now I have 2 houses. Is all of the interest on my new loan deductible since its used to buy both homes?

[sldrozd]

trying to figure out with the new mortgage interest rules, if I can deduct all the interest of the new loan, the new loan is 485K so it is below married filing joint max interest. it seems that the refinanced loan covers the acquisition of both homes (while it is only secured by the primary residence) so hopefully deductible?

[WillK]

Yes, you are able to enter in both 1098 mortgage interest statements into the program and Turbo Tax will calculate the interest you can deduct for both. 

[sldrozd]

thanks. there is only one mortgage, secured by my primary residence (therefore only one 1098) since we paid cash for the second home (with the proceeds from the refinance of the primary residence). I just wanted to make sure when we refinanced the primary residence and pulled the cash out to buy the second home,  all of the 1098 reported interest is deductible under the new rules (I have read that if you refinance and pull cash out, if the money wasn't used on home improvements, the interest on the cashed out portion is not deductible) in our current situation, the cashed out money was used to pay for a second home. hopefully all the interest on the new refi is all deductible?

[gbp1s]

Interested to know if there was an answer to this thread.  We also have a similar situation where we cashed out and paid cash for a second home.  Is the new loan (after the cash out) fully  deductible?

[AmyC]

Yes, both homes can be traced to the mortgage interest so it is deductible. See page 2 for main home and second home, About Publication 936, Home Mortgage Interest Deduction.

@gbp1s

[gbp1s]

Thank you @AmyC