The rules do not make sense....I see what they say, but from a logic perspective it does not add up.
if you sold and bought in a year they penalize you it appears with how they are calculating the average mortgage balance. If you had a $1 million mortgage for 1, 3 or 12 months outstanding, it does not matter, they are going to treat it like you had a $1 million mortgage outstanding for the while year...so if you bought a new home and had a $750,000 mortgage, all of that interest would be disallowed in year 1?
That does not make sense and seems to be counter to what the law says - interest on mortgages over $750,000 are disallowed. The use of the $1 million loan for 1 month screws you for the whole year even if you were under the amount for 11 months???
The law does not saw this - the interpretation of the law by the IRS I think is flawed. Remember it is staffers trying to interpret what the law says and that includes regulations...
