If you held a .5 mill loan for 10 months, and a 1.1mill loan for 2 months, you had an average debt of .6 mill. or $600,000.
(10 x .5) + (2 x 1.1 ) = 7.2 /12 = .6.
Unless you are filing Married Filing Separately, you would claim
10 months of interest on the first loan and 2 months of interest on the second loan.
Once the first home was turned into a rental, the interest would become an expense for the rental.
If you carry more than 750,000 on the second but now primary home next year, the interest may be limited since there will be a larger debt average for the full 12 months.
