Example 2  - just asked a client today that refinanced in 2016 if he took any equity out on the loan. Yes. How much? $6,000. What was it used for? Credit Cards. OK not deductible for 2018. Client thinks new loan was $178,000. We will need the disclosures. Payments are $827. 2018 interest paid will be $6,482. Principle paid (or to be paid) on refinanced loan is $3440. Please provide a formula for determining the qualifying and non-qualifying interest portions. is the equity portion paid first? The acquisition portion paid first? Use a ratio? The IRS to my knowledge has not issued guidance on this. Unless they do so, since the area of the new law would be considered "gray", I will consider the acquisition portion as being paid first, much like distributions from a ROTH IRA are deemed to come from contributions first, then earnings.