Hi experts,
I have special situation that need your help on calculating mortgage interest deductions.
My understanding is that:
But Turbotax tells me to only deduct $7,476 interest, which calculates as: ($15,474 +$11,826) * 750,000 / (1,077,471 +1,661,471).
I think Turbotax assumes both of my primary home interest are for whole year (overlapping), but it's not, home 1 is for 1/1-7/31, and home 2 is for 10/20-12/31, they are not over-lapping, so I think Turbotax's calculation is incorrect.
Is my understanding correct? If so, how should I fix it?
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Actually, this is a fairly common situation, so don't worry.
If you entered the date you started renting in the Rental Section, enter the entire year's Mortgage Interest as reported on your Form 1098, as an expense in this section.
TurboTax will calculate the Rental portion (based on Business % use, based on dates), and automatically put the remaining balance on Schedule A for you, so you won't need to make an entry for that.
You'll only need to enter your second 1098 from your new home in the Credits & Deductions section.
Be careful with the question 'was the property rented every day in 2023'. You need to say 'Yes' here, as it is referring to the time it was designated as a rental.
Here's more discussion on the topic of Rental vs. Personal Expenses.
@Jerryxe
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