@NCperson wrote:
Example 2: In January 2018, a taxpayer takes out a $500,000 mortgage to purchase a main home. The loan is secured by the main home. In February 2018, the taxpayer takes out a $250,000 loan to purchase a vacation home. The loan is secured by the vacation home. Because the total amount of both mortgages does not exceed $750,000, all of the interest paid on both mortgages is deductible. However, if the taxpayer took out a $250,000 home equity loan on the main home to purchase the vacation home, then the interest on the home equity loan would not be deductible.
".....would not be deductible" ON SCHEDULE A.
Your confusion is the result of what constitutes interest that is deductible on Schedule A as home mortgage interest (or investment interest) and interest that is deductible elsewhere on a return.
See https://www.irs.gov/taxtopics/tc505
