Situation:
- Home 1:
- bought mid-2017
- outstanding mortgage balance in 2022 is 550k at beginning of year
- moved out mid-may 2022
- converted to rental
- first tenant from aug 1, 2022
- total year 20k interest
- Home 2:
- bought and moved into mid-may 2022
- outstanding mortgage balance in 2022 is 1100k at beginning of term
- paid 15k points
- total year (from mid-may) 25k interest
- two 1098's for this home, since initial mortgage holder sold to another bank
Both Home 1 and Home 2 were primary residences for different portions of the year, split by mid-may.
For mortgage interest specifically, I've split the interest on Home-1 by occupancy (7k as primary, 13k as rental) - in turbotax I report the 13k as rental expenses and the 7k as modified interest on the 1098 for that home. I then also include the other two 1098's.
As I understand it, due to the 750k limit post 2017, I think that only 750/~1100 = ~68% of the interest for Home 2 is deductible. Which is 68% of 25k = 17k. All of the points paid on Home 2 should also be deductible since it is the primary residence.
This should be a total deductible interest+points of 7k+17k+15k = 39k. However TurboTax seems to be showing only ~18k of deductible interest.
What's going on? How can I fix this reporting?
