I have read a lot of questions on this topic here, but I am still not sure what the "Statements provided by your lender" average balance means.
I had a primary residence with an outstanding mortgage since 2021. I sold that house on April 30, 2024.
I also bought another house on April 4, 2024, and I immediately made my primary residence, also backed by a mortgage. I think (correct me if I am wrong) I can consider the original property to be "second home" for the duration of April 2024 (slowly moving from one to the other and thus using both).
I know the "closing balance" as of each month on each of the mortgages. The question is however, do I add all the numbers and divide the sum by 12 or do I add the numbers relating to the first mortgage and divide by 4, then add all the closing balances for the second mortgage and divide them by 9 (April to December) and add those together?
The phrase from p936 "You can treat the balance as zero for any month the mortgage wasn't secured by your qualified home" as the indication that the first method (divide everything by 12) should be used.
However, the phrase "and dividing that by the number of months the home secured by that mortgage was a qualified home during the year" seems to contradict that.
I am sure this is a very common situation, so I would appreciate if someone who did it in the past can comment if I can safely use the first approach (which obviously, due to increased denominators) gives me better values (actually, makes all of my interest deductible) or if the latter approach must be used (which would only allow me to use approximately 2/3 or the total interest I paid during the year)
