Mortgage Interest on Construction Loan

[Symple13]

Using TT Deluxe.

We originated a Construction to Perm Loan in Sept 2017. Construction finished in Sept 2018. From Jan 1, 2018 to Dec 31, 2018  the outstanding principal increase from $150K to $600K due to construction draws. According to Pub936, the mortgage interest should be fully deductible as we fulfilled all requirements, and moved in once construction was completed. 

I have a concern regarding the TT Home Mortgage Interest Worksheet is unable to handle the increase in principal balance correctly. Entering the numbers as specified by TT instructions, it indicates that the Acquisition Interest is ~$6K, instead of the ~$15K actually paid.

Anyone else seen this, or have a workaround?

Thanks,

RB

[NCperson]

I was able to replicate that in TT Deluxe as well

the issue is that TT is seeing that as 'cash out' which is not deductible

If you look closely at the "interest limitations smart worksheet' at the bottom of the "home Mortgage work sheet', line F4 is the amount borrowed in 2018, which in your case is $450,000.  When you left click that cell, it states that number is pulled from inputs further above on the form, but I see no place where it asks for this years additional borrowings. 

Sound like a 'bug' 

Workaround - change the 1/1/18 balance to $600,000

[MlMastro]

I am having the same problem. Since the information on 1098 is reported to the IRS I was going to change the 12/31/18 balance as a work around.