I'm trying to calculate the right average loan value in light of the $750k cap, for a mortgage taken out partway through the year. Let’s say I take out a $1m mortgage in March (so I have it for 10 months in 2022).
Since I only had the loan for 10 months, when calculating the average loan value, would it be ~$830k or about ~$1m? This average loan value would be used to calculate the % of the paid mortgage interest that can be deducted: either 90%=$750k/$830k or 75%=$750k/$1m. This is unclear in the IRS guidance here using the “Statements” method.
