Hello,
I own 2 houses. Both houses have mortgages greater than $750,000 and were purchased after 2018. I would think that I would calculate the total allowed interest by calculating the allowed interest on each house based on $750,000, then add the resulting figures together. For example, if the first mortgage is $800,000, multiply the interest by the factor (750,000/800,000) or .9375 to obtain deductible interest. Similarly for the second mortgage - suppose it is $1,000,000. (750,000/1,000,000) = .75, so multiple the interest on the second house by .75.
So as an example, if the first property had interest of $10,000, the allowed deduction is $9,375 (.9375 * 10000). Similarly, if the second house had $20,000 in interest, the allowed interest is $15,000 (.75 * 20,000). I would think the total deduction would be $15,000 + $9,375, or $24,375.
However, this is not what is happening in TurboTax. When I enter the data for the second mortgage, the allowed interest deduction actually decreases. How is it calculating the interest deduction? Or better yet, how should it calculate the deduction?
Thanks for your help.
