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j-levine
New Member

I will refinance my 1st mortgage and Home Eq. Loan in 2018. Total is over $750,000. Will I still fall under the 2017 tax guidelines? TurboTax said yes. 2nd opinion?

 
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TaxGuyBill
Level 9

I will refinance my 1st mortgage and Home Eq. Loan in 2018. Total is over $750,000. Will I still fall under the 2017 tax guidelines? TurboTax said yes. 2nd opinion?

In regards to the $750,000 limit, yes, refinanced loans still use the rules based on the date of the original debt.  So you can still deduct interest for loan amounts up to $1,000,000 of acquisition debt.

However, only interest for money that was used to buy, build, or substantially improve the home will be deductible.  Starting in 2018 (tax returns filed early in 2019) you can no longer deduct mortgage interest for money that was used for other purposes.  It does not matter when the loan originated.

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TaxGuyBill
Level 9

I will refinance my 1st mortgage and Home Eq. Loan in 2018. Total is over $750,000. Will I still fall under the 2017 tax guidelines? TurboTax said yes. 2nd opinion?

In regards to the $750,000 limit, yes, refinanced loans still use the rules based on the date of the original debt.  So you can still deduct interest for loan amounts up to $1,000,000 of acquisition debt.

However, only interest for money that was used to buy, build, or substantially improve the home will be deductible.  Starting in 2018 (tax returns filed early in 2019) you can no longer deduct mortgage interest for money that was used for other purposes.  It does not matter when the loan originated.

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