turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Announcements
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

For mortgage interest calc, TurboTax asks: Since you first took out this loan, how much has been spent to buy, improve, or build the home it's secured by? What goes here?

I refinanced a mortgage in 2020 and borrowed more than the older loan payout in order to pay off a car loan as well.  I assume that the answer to the above question in my case equals the amount of the refinance loan, less the payout amount for the car.  But TurboTax still thinks the interest I can claim is the full interest paid in 2023.  In order to get the correct interest to reflect the "acquisition amount", I need to enter the acquisition portion of the remaining principle at the end of 2023 and not the acquisition amount at the time of the loan.  This TurboTax question (and similar question on Fed Mortgage worksheet) is misleading.  Am I answering this question correctly?
x
Do you have an Intuit account?

Do you have an Intuit account?

You'll need to sign in or create an account to connect with an expert.

1 Best answer

Accepted Solutions

For mortgage interest calc, TurboTax asks: Since you first took out this loan, how much has been spent to buy, improve, or build the home it's secured by? What goes here?

In addition, the reason you are seeing all of your 2023 interest as deductible may be because you have paid down your mortgage enough to cover the cash-out. For income tax purposes, all principal payments go toward the cash-out portion of the mortgage first until it becomes 0.

View solution in original post

2 Replies

For mortgage interest calc, TurboTax asks: Since you first took out this loan, how much has been spent to buy, improve, or build the home it's secured by? What goes here?

If your refinance in 2020 was to refinance the original mortgage to buy the house, enter the original principal borrowed to buy the house, not the amount refinanced minus the cash-out for the car. Enter your 1098 as you received it, including the origination date for the refinancing loan in box 2. Then when asked, select 'This is a refinance of a previous loan'. Turbo Tax will ask you to enter the purchase date of the home bought with this lender. Enter the origination date of the original mortgage.

For mortgage interest calc, TurboTax asks: Since you first took out this loan, how much has been spent to buy, improve, or build the home it's secured by? What goes here?

In addition, the reason you are seeing all of your 2023 interest as deductible may be because you have paid down your mortgage enough to cover the cash-out. For income tax purposes, all principal payments go toward the cash-out portion of the mortgage first until it becomes 0.

message box icon

Get more help

Ask questions and learn more about your taxes and finances.

Post your Question
Manage cookies