Can the MCC credit be used partial year?

[gne4you]

I have a MCC certificate, but refinanced my home in July 2019. Can I use the MCC credit on the old loan that I had prior to the refinance? I lost my MCC credit during the refinance. I have two separate 1098 (one for the old loan I had with the MCC and then second one that I have for the new loan?) I understand I can not use the MCC credit for the new loan, but I am not able to locate anything that says I cannot use the credit for the old loan. Please help :(

[DaveF1006 · Accepted solution]

I researched the statutes and i can't find any information to the contrary that says you can't. Please review this IRS link and look for the section that addresses Mortgage Interest Credit (pages 8-9).

[gne4you]

Thank you DaveF1006. 

In contacting individuals, I can't seem to get a straight answer, which is mind boggling. The statute doesn't say that you are automatically disqualified from using the credit if a refinance is done and the MCC credit is lost, so I am wondering if this can be appealed if the IRS tries to audit me? 

The statute only states, "If you refinance your original mortgage loan on which you had been given an MCC, you must get a new MCC to be able to claim the credit on the new loan. I only want to know if I can use the credit on the old loan only, but the statue does not address this. 

Sounds like investing in audit defense my be my best option being that the statute does not state I can not use it for this particular situation. Would you agree?

[DaveF1006]

I would invest in audit defense just in case if this is questioned by the IRS. It may be well worth the price.

[Papaburies]

I'm in the same boat, and can't find any information.  Did you go for it?  Success? 

[gne4you]

No I didn't. I called the department that issued the MCC. I was told no. The individual agreed it wasn't in the statue, but advised me not to claim it. It wasn't worth the possible drama. So I didn't bother. Once your flagged by the IRS it is downhill forever. Not worth the hassle.