Hi all,
I'm having a bit of difficulty understanding Pub 936 and was wondering if someone could check my calc using the Average First and Last method. Numbers are rounded below for simplification. No loans began before 2017 and all are subject to the $750,000 limitation. Activity during 2022 includes:
- Sold my primary residence in WA on 12/05/2022
- Used my HELOC (secured by WA property) to purchase my new primary in NC (paid off at 12/05/2022)
- Purchased NC primary on 7/08/2022
| | Beginning Principal | Ending Principal | Average |
| WA Property | $500,000 | $490,000 | $495,000 |
| NC Property | 390,000 | 380,000 | 385,000 |
| HELOC | 105,000 | 105,000 | 105,000 |
| Total | | | $985,000 |
So I would take $750,000/$985,000 = 76% and apply that to the total mortgage interest or am I missing anything here? Should I be factoring in the duration that I held each loan (ex: NC mortgage only applicable for 5 mo.) or am I okay as is?
Thanks!
