Home Acquisition debt term limit

[bruehaus]

My question involves deductible mortgage interest. According to Temp Reg 1.163-10T(m)(4), the term of refinanced grandfathered debt cannot exceed the remaining term of the grandfathered debt. Does this term limit apply to Acquisition Debt in general, or only debt incurred before August 16, 1986 (grandfathered debt). It appears that the cited reg is only placing this term limit on debt incurred before 8/16/86, to ensure that debt will eventually “retire”. It does not apply to acquisition debt incurred after that date. For acquisition debt incurred after 8/16/86, if this debt is refinanced, can the term of the new loan exceed the remaining term of the old loan?

[RJM]

I also want to know the answer to this one. I remember the grandfathered debt treatment concerning term, and never adjusted for it because it did not seem worth the effort. I ignore this issue with newer mortgage refi's, but I know audits are increasing in this area. Anyone have the correct cite?

[Bees Knees]

TTB page 4-11 explains the difference, and what happens with a refinance.