mortgage interest

[rhenry7773]

On the mortgage interest section, It asks "have you ever pulled cash out from this loan when you refinanced it?" I put in "yes"and said I used some of the loan on something other than the home. I also did this last year when I got the loan. Why am I being charged for it again?

[DanaB27]

Please be aware that you can now only deduct the interest from the amount of your loan that was used to buy, build, or substantially improve the home. Since you used part of this loan to pay for things other than this home, you can't deduct the interest from that amount of the loan, even if the transaction didn't take place this year. Therefore, each year you will only be able to deduct only part of the mortgage interest.

[Grandeb]

How do you determine the amount of interest that is deductible if you have taken a portion of the funds from the loan for something other than home improvements, etc.  Seems there would be at least a portion that would be deductible.

[NCperson]

how much was the 'aquisition debt' - meaning what the mortgage balance of the original mortgage used to buy the home AT THE TIME you refinanced it?  of the cashout beyond that how much was used to improve the home?  the sum of those two figures is your 'acquisition debt'.  

that 'aquisiton debt' divided by the mortgage balance is the percentage of the mortgage debt that is deductible,

• if you want to be even more precise, do that same assessment for each of the 12 months of 2019 and create an average amt of 'acquisition debt'  and total debt.   the 'average acquisition debt' divided by the average total debt is the percent of total mortgage interest that is deductible,