You are on the right track, however, you have overlapping months of outstanding loans so you are unable to use the first month on one loan and last month of second loan. You will need figure separate loan balances and add them together.
Question 1 - No, not correct use the below example to calculate your average loan balances.
Using general numbers and reference Publication 936, Table 1.
Loan 1 = beginning balance on 1 Jan 2022 (box 2 1098). $585,000; ending balance (payoff $580,000) Average mortgage balance with payoff in Aug (8 months). 585K + 580K/2 = 582.5K (8/12) = 388,333 (Table 1 lines 2, 6) Interest paid: 15,000
Loan 2 = beginning balance (box 2 1098) - 1.9M; ending balance 1 Jan 2023 (first statement 2023) 1.5M with 6 months interest paid (Jul-Dec) Average balance 1,900K + 1,500K/2 = 1,700,000 (6/12) = 850,000 (Table 1 line 7). Interest paid 15,000
Add those average balances together 388,333 + 850,000 = 1,238,333 (Table 1 line 12)
Question 2 - 750,000. Since your average balance for the 2016 loan is below 750K the qualifying loan limit is 750,000 (Table 1 line 11).
Question 3 - Therefore 750,000/1,238,333 = .6056 (Table 1 line 14)
Total interest paid: 30,000 (Table 1 line 13) x .6056 = 18,169 Deductible interest paid (Table 1 line 15).
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