Hi, thanks for the response, though this doesn't really address my question. Specifically asking about how to handle a situation where you sell one home, then buy another in the same year. Not refinancing or taking out a HELOC.
Here's a simplified example:
House 1 (primary residence): Own 1/1-6/30, average mortgage balance over that time $500,000, sell on 6/30
House 2 (primary residence): Own 7/1-12/31, average mortgage balance over that time $500,000
The current TurboTax method simply sums the average balances from both mortgages (total: $1,000,000), then calculates that only 75% of mortgage interest is tax deductible ($750,000/$1,000,000).
However, at no time during the year was over $750,000 of mortgage debt held (since the mortgages were not held at the same time), and so all mortgage interest in this scenario should be tax deductible. There should be an accurate way in TurboTax to account for this scenario. It is not a rare one.
