@TBain I refer to Publication 936, the Average Mortgage Balance section, Examples 1 and 2. Both annualize the mortgage debt.
Further, using an example of two loans. One home that was sold in May with an average balance during only those months of 600,000 (below 750) along with a home purchased in July for 605,000 so an average balance of 600,000 for only July - Dec. Never was the indebtedness over 750,000, but if they are not annualized the aggregate is going to be 1,200,000 and limit the deduction.
However, if annualized and aggregated the interest is deductible as it should be.
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