@NCperson pb936 does not address how to calculate balances IF the mortgage is obtained mid year or end of the year. All examples and methods the pub 936 explains apply to someone who has a mortgage for the whole year ( 12 months) only. The only one that we could possible apply to our case is the "Mixed-use mortgages" example mentioned, however it talks about grandfather mortgages which isn't applicable in mine or @fredericrose cases either.
The pub 936 does not make it clear how to handle our situations when the mortgage was obtained mid or end of the year, selling and buying, etc. But you can see in that mixed used mortgages example that you calculate the average balance for the year, not for the term of the loan as Patricia originally mentioned. Either way, there are many ways to calculate the average number. It's just simple math, actually. What Patricia suggested is inaccurate and her post is actually confusing and confuses people. She said "(first + last) times months/12"- that is not how you calculate the average number of anything and that would not give you the accurate result either. Maybe, it was her typo but if anything, it should be ((first + last)/2) times months/12 as fredericrose said or just add all monthly balances/12 as I mentioned. That is how you calculate the average number.
What @fredericrose said is accurate, and what I mentioned is accurate as well. In this case, to calculate average number for the whole year is just simple math.
