Ignore most of my earlier post. I downloaded 2020 TT software and tried to override on Schedule A , which created an error that wouldn’t allow e-filing, and no place to override on Home Int Wkst either in View - Forms.
Did find a fix:
1. Prepare Excel type worksheet to calculate deductible mortgage interest consisting of:
A. 10K from first 500,000 loan, plus
B. Average Principal Outstanding on new loan calculated per IRS Publication for Mortgage Interest Deductible (Simple Calculation would be end of month principal for each month the loan was outstanding and divide total by total number of months loan outstanding , which will give you an average principal outstanding slightly less than 1,000,000 used in your question). Then calculate deductible interest as ($750000 divided by calculated average principal outstanding) times 20K.
Take the calculated total per above and go to Tax & Int Wks in View Tab - Forms and Right Click on Line A2 in Mortgage Interest Limited Smart Worksheet on said form and click on Add Supporting Details. In DESCRIPTION COLUMN type in “calculated amount” or similar descriptor and go to AMOUNT COLUMN and enter the above calculated allowable deductible mortgage interest amount. Hit Enter and the correct interest deduction will automatically transfer to Schedule A without creating an error that prohibits you from filing electronically.
Post if you have any issue. Good night.
