Mortgage interest for 2020 was $9746 but 1040 shows only $6168 as deduction, why not full amount? refinanced in 2020 and also mortgage was sold to another lender

[mehmoodnaqvi]

not sure why 1040 in turbotax is deducting only 6168 instead of 9746

[Mike9241]

did you do a cash-out refi?  it would result in a limit on the interest deduction unless the mortgage was taken out before 12/15/17 then there would not be a limitation unless the refi was for more than $1 million.

[Carl]

If you did a cash out refi in 2020, then only the percentage of interest equal to the percentage of the new loan used to pay off the old loan, is deductible on SCH A, for the life of the new loan.

[mehmoodnaqvi]

No I didn't took cash out of refinance, but I read it somewhere that I should put $0 in box 2  outstanding mortgage principal for refinance and that is working but I am not sure if this is the right way of doing it.