How does Turbotax calculate qualified mortgage interest deduction for a house purchase before 2017 and one after 2017

[phoenixarka]

Hi, we have two primary houses in the family. One(A) was purchased before 2017 and one(B) after. The mortgage balance for A was around 450K and the balance for B was around 400K. The total is exceeding 750K. However as A was purchased before 2017 and balance was under 500K, I thought all interest was qualified for deduction? The interest paid for A was around 10K in 2022. For house B, the interest I paid was around 11K in 2022. There are essentially three ways to calculate the qualified deduction:

1. (11K+10K)*[(450K+400K)/750K]

2. 10K + [(750K/2)/400K] * 11K

3. 11K + [(750K-450K)/400K] * 12K

Which one is correct? Or are they all correct and I could just choose the highest one? The current number from turbotax is pretty low and under my expectation.

Thanks!

[DMarkM1]

The correct math is [750K/(450K + 400K)] * (11k + 10K).   I'll use Publication 936, Table 1 for reference.  

In your situation your qualified loan limit is $1M (lines 3 and 4)  or the average balance of loan one (lines 2, 5, 6) whichever is less but not less than $750K (lines 8, 9, 11).    That loan limit (line 11)  is then divided by the total of the average balances (line 12) on your loans.  The resulting ratio (line 14)  is multiplied by the total interest paid (line 13) to arrive at your mortgage interest deduction (line 15).