So my situation is that I sold my old condo in June 2024, which had a mortgage balance of about $280K, and purchased a new home that same month, with a mortgage of $634K. Obviously, these are both under the $750K limitation, and there was no overlap between these two loans; I obtained the latter a week after paying off the former. I understand that I can use the IRS-sanctioned "average balance" method so that 100% of the interest on both mortgages is deductible... My question is, how do I do this within TurboTax? The software seems to want to limit my deduction based on summing the two mortgages together for a total outstanding balance well above the $750K limit. Do I need to report a different outstanding mortgage balance than what is shown on my 1098s for each? Or do I just manually override the deduction on the screen where it tells me that my deduction is being limited, and will this be some sort of a red flag for the IRS?
Thank you!!
