Refinance Home with Cash Out

[lcubed2004]

Refinanced home in 2019 -  Received two 1098 forms.

1st - Box 2 - outstanding mortgage 182,388 - Box 1 Interest 6408.04, Box 3 - 10/12/2010

Yes this loan is secured by property 

Yes this is original loan

Re-financed in Oct 2019

Second form

2nd - Box 2 - Outstanding mortgage 230,000 - Box 1 Interest 1960.38, Box 3 - 10/15/2019

No points to deduct

Yes - loan is secured by property

No - this is a loan that's been refinanced

A mortgage loan that I've refinanced

Have you ever pulled cash out from this loan when refinanced? Yes

Have you used money on this home?  No

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I am stuck at Help me figure this out! 

How much spent to buy, build etc..?  (I didn't spend any of the cash out on the home... but not clear what number I enter here)

Balance of mortgage loan on Dec 31, 2019 (I'm guessing this is the 230k - two months of payments? )

This loan was paid off during 2019?   Shouldn't this question be on the first Loan?  

I should still be able to deduct the interest paid on the 182,388 - but I don't see a way to just remove the 47k cash out in the calculations?   

Any advice would be appreciated.

[DMarkM1 · Accepted solution]

In the "Help me figure this out" item, the box for amount spent on the original home, will be the principal pay off amount. 

The balance on 31 Dec 2019 for the refinance loan is, as you surmise, the actual balance on that date or 1/1/2020 after the couple of payments. 

Once you enter all 1098s and click "done" and then "wrap up tax breaks" you will come to a page that shows "itemized" or "standard deduction" chosen.  Below that you should see a hyperlink that shows a "breakdown of itemized deductions."  

In there you will see a reduced amount for deductible interest.

[lcubed2004]

Thank you!  The desktop version has some issues so I ended up going to online live and re-entering my return.  Everything seemed to work as expected online but the principal payoff was the answer I was looking for.