Deductions & credits

My "workaround" for now is to create a synthetic 1098 that combines the values.  So it has the sum of the interest that I paid on both loans, but a principal amount that's equal to the weighted average principal that I held throughout the year.

 

I included a note to the IRS explaining the situation.

 

At the end of the day, the correct amount of the deduction is a function only of 1) total interest paid, and 2) average amount of origination principal.  So using this workaround produces the correct amount of tax.  I wish that TurboTax could do this correctly on its own though.  I feel like if I had access to the source code I could fix it quickly.