I refinanced my home mortgage loan AND a the outstanding balance on a separate home equity line of credit (HELOC) into a combined mortgage loan of $1,044,000 in November 2020. All of the loans were and are with the same lender. The old now repaid home mortgage loan was 100% home acquisition debt, had a 2016 origination date, and had a balance of approximately $873K at the time it was repaid and the old HELOC balance was approximately $171K at the time it was paid down. No part of the HELOC balance was home acquisition debt and I have never taken an interest deduction on it. So for 2020 I now have three 1098 forms from the same lender: (1) one that includes 11 months of interest attributable to the original 2016 mortgage loan that should be 100% deductible; (2) one that includes 1 month of interest attributable to the new 2020 combined mortgage loan (intuitively I would think that 83% ($873,000/$1,044,000) of this interest would be deductible); and (3) one that relates to the HELOC that I don't take a deduction for. Looking for guidance on how to properly input all of this in turbotax for 2020 and going forward in future tax years. Thank you.
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This link has details on entering your 1098's for an Original/Refinanced Loan.
Click this link for a more info on Home Mortgage Interest.
I don't believe that combining the 1098s into one 1098 works. All of the interest paid in 2020 related to my old 2016 mortgage should be 100% deductible as home acquisition debt, but the new 2020 combined/refinanced loan 1098 also includes some nondeductible HELOC interest.
I should have mentioned no cash out when I refinanced in 2020.
I think that I should continue to get the benefit of the pre-2017 higher limit (up to $1 million) home acquisition debt applied to the approx. $873K from my 2016 mortgage that I refinanced in 2020.
Also, if I follow the advice in the link provided, what would I enter for the amount of the outstanding mortgage principal? The amount of the combined/refinanced 2020 mortgage ($1,044,000), or the approx. $873K that I refinanced from my 2016 origination date mortgage loan, or the approx. $171K that I paid down on the separate HELOC? Also, what would I enter for the origination date (2016 or 2020)? If I enter 2020, does that mean I am no longer able to deduct the higher limit pre-2017 $1 million amount?
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