If both mortgages originated after Dec 15, 2017 and consists only of acquisition debt, you handle the overlap by calculating the average balance of each loan separately, adding the two average balances together, and dividing that $750K by that sum. The result will be the percentage of interest you can deduct.
Turbo Tax will calculate the deductible interest for you. Enter each mortgage 1098 in succession, starting with the sold home followed by the bought home. Be forewarned, your interest deduction takes a big hit in year you sell one home and buy another. If average balance of each mortgage if over $750K, the percentage of deductible interest will be limited to $750K/(Sum of both mortgage average balances). This will get you less than 50% of your interest payments that you can deduct. Most people think this is unfair, myself included, or that Turbo Tax is not calculating it correctly, but this is in accordance with Pub 936.
In my opinion, a fair approach would be to combine the monthly balances of both loans, January through December, and dividing by 12 to get the average balance and divide the $750K Limit by this amount. This will get you around 90% of interest deduction. But again, not the way TT does it and not according to Pub 936 (it should be though).
