rvijayc
Returning Member

Deductions & credits

Thanks @zomboo  for the reply. But, this seems counter-intuitive in many ways. For example, if I only report the second mortgage-B (average balance $966K and interest $20K), I get a deduction of $15.5K which is higher than the case with both mortgages reported ($14.8K), but I suppose that I don't have a choice here and I need to report both of them as potentially qualified interest deductions?

 

What about the case where I refinanced a (post-2017) 750K mortgage in the middle of the year and I receive 2 1098s (one from each lender). Does this situation result in my mortgage interest deduction getting slashed by 50% for that year?

 

It also seems to like the best time to execute a simultaneous sale/purchase (or refinance) is at the end of the year timed such a way that we get exactly one 1098 per year (so that they don't get bunched up in a single year).

 

A "fair" approach (that also seems intuitive) would be to compute the qualified interest on a month-by-month basis by comparing the per-mortgage average balance at the end of each month summed together against the corresponding debt limit, and then sum the monthly qualified interest together to compute the qualified interest for the year. Does anyone know if IRS allows this detailed approach?

 

Thanks!