In 2020, we sold our principal residence (old) in April and bought our current principal residence (new) in Sept.
So in April 2020, our old principal was paid off in full due to fact we sold our old residence (principal for old residence was less than 750k) . We paid mortgage interest for this old home and received a 1098.
We received another 1098 for our new residence for which the loan amount is > 750,000. Now here is my question -
since my new loan amount is greater than 750k, IRS would not let me deduct interest that was paid for my old loan amount that was less than 750 k ?
I played a few tricks to see if TT would increase my deduction by entering the new loan amount to be less than 750 k, but the amount we owed in taxes did not budge.
So for 2021, should I ensure the outstanding loan amount is less than 750k for new residence by Jan 1 2022 ? how can I ensure I can at least deduct my mortgage interest I am paying in 2021 next year when I prepare my taxes ?
