Mortgage and Heloc Interest

[hnpot]

Back ground: I have a 1098 for a refinanced mortgage with a loan origination date of 11/1/2016. Refinance was for our house only, no cashout. Original loan for house was 03/2004.  Has been refinanced several times

I have a 1098 for a HELOC that was used ONLY to improve our house with a loan origination date of 9/28/19.

Turbo tax asks if any apply to this loan from the mortgage bank:

- Original debt occurred before 12/15/2017 and debt amount has not increased since origination with any refinances (home purchase before 12/15/2017 and no cash out refinanced)

- Home purchase started on or before 12/15/2017 with closing finalized before 4/1/2018 with no additional debt be taken on since 4/1/2018.

I think the answer is No to both, but I am not totally sure what the first is asking. Is Original debt when we bought the house in 2004 or this refinance loan? And debt amount has not increased since origination. Is that of original loan or this refinanced loan?

But, the bigger question comes from the next page after you hit either yes OR no, Turbo Tax asks: When did you buy the home with the loan from {HELOC Bank}.  Then there is a box with Purchase date of home:

How do I answer this: Since I did not buy the home with the HELOC, I bought it with the first mortgage, I improved the property with HELOC, I do not know what Turbo Tax is looking for. 

Once this is answered I am done with taxes, so I would greatly appreciate any help!

HNP

[fanfare]

since all funds borrowed were used to buy, build or improve your home.

all the interest is deductible, unless the loan amount exceeded the phasout range.

You should answer NO or N/A for any other exceptional circumstances.

@hnpot 

[fanfare]

Always print a copy of your completed tax return for your records, and review it carefully before e-Filing.
You will need it if you are audited by the IRS, to contact the IRS, or to amend if a TurboTax update changes your return or for any other reason,
SUCH AS, ....

       to verify the correct interest deduction on Schedule A

AND, to find your AGI next year.

@hnpot 

[hnpot]

What are your thoughts on:

Turbo Tax asks: When did you buy the home with the loan from {HELOC Bank}.  Then there is a box with Purchase date of home:

I didn't buy it with the HELOC loan so I don't know how to answer this.

HNP

[zomboo · Accepted solution]

When Turbo tax asks for you refinance loan if the "Original debt occurred before 12/15/2017 and debt amount has not increased since origination with any refinances (home purchase before 12/15/2017 and no cash out refinanced)" answer YES. This is asking if the original mortgage date was before 12/15/2017.

When asked 'When did you buy the home with loan from HELOC bank. Enter the original purchase of your home (2004). This is because the HELOC loan is secured by your home and subject to its origination date.

[hnpot]

Thank you so much.  That makes total sense. I appreciate you taking the time to explain!