May be above my pay grade. Went back Publication 936, and using average loan balance using ending balance of each loan the method proposed by me and original poster may limit their interest deduction by too much. Please check my math and logic. Poster wanted to deduct 10K plus 75% of 20K or combined 25K. TT was at calculating 75% of both or 22.5K, I presume.
Reading Publication 936 and using end of month basis to calculate Average Balance (because loan example was twice as much on second loan and interest was also twice as much, I used 6 months outstanding fir each loan ... may be off as rates probably not identical) I calculated Average Balance as:
Loan 1:
500,000 times 6 months = 3,000,000 divided by 12 = 250,000
Loan 2:
1,000,000 times 6 months = 6,000,000 divided by 12 = 500,000
Add loan 1 and loan 2 Average Balances for a total of 750,000... so all is deductible as equal to or below $750,000 limitation. Your thoughts? Poster would have to do exact calculation.
