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,