@zomboo wrote:
The fairest approach, in my opinion, is to simply treat sale/purchase as a refinance which in effect combines the monthly balances of the two loans, summing the monthly totals, and dividing by the number of months the two loans span (usually 12).
What I was proposing is probably similar to the above. Basically, execute Table-1 Instructions in Pub 936 on a month-by-month basis and add the qualified interest deduction per month (line-15) to get the yearly deduction. Even if I follow the more conservative approach, this certainly seems like a question to ask IRS for clarification (unless they've already clarified).
