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Level 2
April 8, 2021
Question

How do I account for home equity funds that were not used to build, buy or improve the main home when the loan is refinanced the next year?

  • April 8, 2021
  • 1 reply
  • 7 views

My client refinanced in 2019 and used $100K to payoff credit card debt.  When rates dropped in 2020, he refinanced the entire loan and I'm not sure how to account for the $100K in the software since it was refinanced into a new home loan.

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1 reply

sjrcpa
Level 15
April 9, 2021

100K/total loan times total interest = nondeductible interest.

You can use the excess mortgage computation section in Lacerte and it will do the calculation.

The more I know the more I don’t know.