the rule is based on the date the loan was taken out.....so you are limited to $750,000 for full interest deduction.
however, over time, all the interest will become deductible as the loan amortizes.
the IRS assumes that the part over $750,000 is what amortizes first so what is deductible is $750,000 / loan balance * interest. That percent will continue to increase towards 100% as the 'loan balance' decreases towards $750,000.
