What portion of 1098 interest can I claim?

[eliyah-kilada]

I opened a HELOC loan on my primary house and used it to put a down payment on a rental that I purchased back in 2018. Then, in 2020, I refinanced my primary house and consolidated the HELOC with the existing mortgage balance (of my primary home) in 2020. (i.e., I paid off the HELOC and closed it). Looking at the new (consolidated) loan that started in 2020, I have the following question.  When I am asked to report the mortgage interest in year 2023. What portion of the balance/interest on Form 1098 can be tax deductible? Should I deduct the HELOC loan amount from the total loan balance when it was created in 2020? Since 2020 until now I have already paid off enough mortgage on the new load more than the total value of the HELOC I paid off in 2020.

Thanks much,

[RobertB4444]

The value of your mortgage is not a tax deduction.  It just sets the limit for the amount that that you are able to deduct.  So you should enter the full balance shown on the 1098 as that is the value of the mortgage that your house is securing currently.

@eliyah-kilada