I've been dealing with a very similar situation and wanted to share what I learned after going through this process. Like you, I did a cash-out refi on my paid-off primary home and used the proceeds to purchase a second property that my college-age daughter uses while attending school. After extensive research and consultation with a tax professional, I can confirm that your mortgage interest should indeed be deductible. The key factors working in your favor are: 1) The loan proceeds were used to acquire a qualified residence, 2) The debt is secured by your primary home, 3) Your son's use as your dependent counts as personal use by you, and 4) Your regular visits establish it as your genuine second home. What really helped me was organizing all my documentation upfront - closing statements from both the refinance and the second home purchase showing the direct flow of funds, plus a simple calendar tracking my personal use of the property. The IRS wants to see that clear money trail and evidence of personal use. One important note: make sure your total qualified residence debt stays under the $750,000 limit. Since you paid off your primary before the refi, you're likely well under this threshold. Given that this deduction pushes you into itemizing, the tax savings could be substantial. Just make sure to keep detailed records and consider a consultation with a tax professional who specializes in real estate transactions for added peace of mind. The rules can be complex, but your situation appears to fit squarely within the allowable parameters.

I went through a similar situation last year and the confusion around Publication 936 is totally understandable - it's written in such dense tax language! Based on everything I researched and confirmed with my tax preparer, you should be able to deduct that mortgage interest. The key thing that works in your favor is that you used the cash-out refi proceeds specifically to purchase another residence, which keeps it classified as acquisition debt rather than home equity debt under the Tax Cuts and Jobs Act rules. Since the second property qualifies as your second home (your son living there as your dependent actually supports this, plus your personal use through visits), the interest should be fully deductible as long as you're under the $750,000 qualified residence debt limit. I'd definitely recommend keeping a simple log of your visits to the second property - just dates and brief notes like "family weekend" or "maintenance visit." This creates documentation showing consistent personal use if the IRS ever has questions. Also make sure you have clear records showing how the refinance proceeds went directly to purchasing the second home. Since this deduction would push you into itemizing and make a significant difference in your tax situation, it's probably worth a consultation with a tax professional who handles real estate transactions just to double-check everything. But based on your description, this seems like a straightforward case where the interest should be deductible.

Last year I had the same issue but it sorted itself out by the 15th. Just gotta be patient unfortunately

I'm in the same situation! Filed early and was expecting my Michigan refund today too. Really frustrating that they don't communicate these system issues better upfront. At least now I know it's not just me - thanks for posting about this! Guess we're all stuck waiting until after the 13th 😤

I think another factor that might explain the discrepancy is the different ways states handle standard and itemized deductions for part-year residents. Many states prorate the standard deduction based on the portion of the year you were a resident. So if you lived in a state for 3 months, you might only get 3/12 of the standard deduction amount. For itemized deductions, some states require you to prorate all itemized deductions, while others allow you to claim the full amount of deductions for expenses like property taxes or mortgage interest on property located in that state, regardless of your residency period. Have you checked if your tax software is prorating your standard deduction correctly? That could account for some of the difference you're seeing.

This is a really complex situation that many people face when moving between states mid-year. From what you've described, there are several factors that could be causing the discrepancy between your calculations and TaxSlayer's results. First, Washington State actually doesn't have a personal income tax on wages, salaries, or most other types of income. Are you perhaps referring to a different state? If you meant a different state with income tax, that would explain the confusion. However, regarding the 529 distribution tax you mentioned - that's likely correct. Many states do impose taxes and penalties on non-qualified 529 withdrawals, and this is often overlooked when people do their own calculations. For Oregon, the difference you're seeing could be due to how they handle the various loss limitations. Oregon has specific rules about how much of your capital losses and rental losses can offset other income in the current tax year, and these limits might be stricter than federal rules or different from what you calculated. I'd recommend double-checking which state you actually lived in before Oregon (since Washington doesn't have income tax), and then reviewing both states' specific rules for part-year residents. The "taxation based on total annual income" method that others mentioned is definitely a key factor that catches many people off guard.

Hmm, I think everyone's missing something important here. The mini-split heat pump might actually qualify as 5-year property under MACRS, not 39-year property. HVAC equipment is typically considered 5-year property when it's not a structural component of the building. Since mini-splits are somewhat standalone systems (unlike central HVAC that's built into the structure), you might be able to depreciate it much faster even without Section 179 or bonus depreciation.

This is a great discussion with some really valuable insights. Based on everything shared here, it sounds like you have a few solid options for your mini-split depreciation: 1. **Section 179**: Given your 3.5-day average rental period (well under 30 days), you should qualify for the short-term rental exception. This would let you deduct the full $3,835 in 2024. 2. **5-year MACRS**: As Cole mentioned, mini-splits often qualify as equipment rather than building components. This could be a middle ground - faster than 39 years but spread over 5 years instead of all at once. 3. **Bonus depreciation**: 60% immediate deduction for 2024, then depreciate the remainder. Given your $145k AGI, I'd lean toward either Section 179 or the 5-year MACRS approach. The immediate deduction from Section 179 could be valuable at your current tax bracket, but you'll want to consider the QBI implications Jasmine mentioned. One thing to keep in mind: whichever method you choose, make sure you're applying it consistently to similar improvements. The IRS likes consistency in depreciation methods across similar assets. Have you considered getting a second opinion from a tax professional who specializes in rental properties? With the complexity of short-term rental taxation, it might be worth the investment to ensure you're maximizing your deductions while staying compliant.

22 Has anyone used TurboTax to handle reporting this kind of situation? I'm in a similar situation with medical crowdfunding and wondering if the basic version handles this or if I need to upgrade.

I went through something very similar after my car accident last year. My family set up a GoFundMe that raised about $28,000 for my medical expenses, and I was terrified about the tax implications. After consulting with a tax professional, I learned that medical crowdfunding donations are indeed treated as gifts and aren't taxable income to you as the recipient. The key is that people donated without expecting anything in return - they were helping with your medical crisis out of generosity. A few important points from my experience: - Keep detailed records of the GoFundMe campaign, including the total raised and donor information - Save all your medical bills and receipts showing how the money was used - If you itemize deductions, you can only deduct medical expenses you paid out of your own pocket (not the portion covered by GoFundMe) - The donors are responsible for any gift tax reporting if they gave over the annual exclusion limit I kept a simple spreadsheet tracking donations received vs. medical expenses paid, which gave me peace of mind. You're not required to report the gifts as income, but having good documentation is always smart. Hope this helps ease your worry!