If I understand you correctly, you received two 1098's, one for the old home and one for the new. if so, enter an average loan balance between the two 1098's in Box 2 of the 1098 for the house that was sold and then leave Box 2 blank for the second 1098. If you enter an amount in the second 1098, this will combine the balances and will limit your mortgage interest thinking you are over the $750K threshold to claim a mortgage interest.
[Edited 03-01-2021|01:32 PM PST]
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