I am trying to calculate the home mortgage interest deduction accurately because I bought and sold a home in the same year, 2022. Pub 936 on IRS website is confusing and doesn't cover my situation. I got multiple 1098s from my lender with these scenarios -
1. Home 1 - original loan was taken in Feb 2016
2. Home 1 - Loan was refinanced in 2019
3. Home 1 Sold and loan was paid off ~$580k in August 2022
4. Home 2 Bought in June 2022 - Initial loan balance was $1.9M and ending balance was $1.2 as of Dec 2022.
Question 1 - If I follow the instructions to calculate average of the loans, it should be adding up the start of the year 2022 loan balance ($580k) and end of year 2022 balance ($1.2M) which comes down to ~$900k. Is this correct?
Question 2 - Is my limit $1M or $750,000 because the original loan was taken in 2016 but was then refinanced in 2019?
Question 3 - Assuming its $900k for question 1 and $750k for question 2, ($750k/$900k = 83.33% of the mortgage interest amount paid) is deductible?
I appreciate your support in answering this.
