I have two mortgages both acquired after 2020 (2022 and 2025). So they are subjected to the 750k limit.
The first house was my primary residence from January to October of 2025, while the second house was my primary residence in November and December. (The second house was acquired in September. The first house was rented out from November onwards.) For the sake of simplicity - Lets assume my average mortgage balance for both houses is 1 million each in 2025. I paid 30k in interest for the first house, and 10k interest for the second house.
How do I calculate the average balance in p936 worksheet?
If I just sum up the two mortgages, the ratio of 750k/2M is lot smaller (0.375) than if I had just a single mortgage (0.75) - which reduces my interest rate deductions a lot. I thought since I have the second mortgage for just 2 months it should be prorated accordingly? Something like (1M * 10 + 1M*2)/12 = 1M ?
