ptax255
Level 7
‎09-02-2023 09:07 AM

Hi, client had a mortgage of $500K. Refinanced $900K where the excess was not used towards the principal residence, so not deductible. Total interest paid $20K. What's the best way to calculate the deductible interest? Do I just pro-rate based on principal amount?

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Terry53029
Level 15
Level 15
‎09-02-2023 04:34 PM

Here is a link to 2022 pub 936. You need to research yourself, as you provide very few details. https://www.irs.gov/publications/p936

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