Question on Cash Out Refinance- Co-owner Buyout

[taxnewby101]

I refinanced my primary residence and took out an additional $70,000 in cash to buy out my co-owner’s share of the home. Since those funds were used to acquire full ownership of the same property, is the interest on the entire refinanced mortgage fully tax-deductible as acquisition indebtedness?

[MonikaK1 · Accepted solution]

If all of the funds from the refinanced loan were used to acquire or improve the residence, then the interest is tax-deductible, subject to dollar limits on total indebtedness and the threshold for itemizing deductions.

See this TurboTax tips article for more information on mortgage refinancing and tax deductions.