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Taxpayer has a 1098 for interest on qualified home acquisition mortgage prior to 2018 and mortgage is under $1M and so all of the interest is deductible on Schedule A Line 8A.
Taxpayer has a second 1098 for home equity debt that was not used to buy, build or improve the main home and so for federal Schedule A, none of the interest is deductible.
On federal Schedule A, does taxpayer check the box on Line 8 indicating he didn't use all of the home mortgage proceeds from those loans to buy, build,or substantially improve his home?
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Just don't enter the second one into the software.
Slava Ukraini!
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Thanks- if I just enter the acquisition interest on Line 8a, do I need to check the box on Line 8?
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No
Slava Ukraini!
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Beware some states did NOT conform to the mortgage interest limitations, so entering the second Form 1098 might still be advisable.
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Thanks-you are correct. Lacerte has a place to enter the equity interest for the state. I think the box on line 8 is just to trap people who don't know how to do a return. Some people may try to put equity and acquisition interest on Line 8 and will get caught by IRS if they check the box indicating all the interest isn't for acquistion. I think you should not check the box if Line 8a is just acquisition interest.
The Schedule A instructions aren't clear.
Check the box on line 8 if you had
one or more home mortgages in 2019
with an outstanding balance and you
didn't use all of your home mortgage
proceeds from those loans to buy, build,
or substantially improve your home. Interest
paid on home mortgage proceeds
used for other purposes isn’t deductible
