Mortgage Interest Deduction not calculating average daily balance when Buying new Home at end of year.

[alex-jones]

Hi,

I filed my tax return and just realized that turbo tax incorrectly capped my mortgage interest deduction due it not calculating my average balance of my mortgages and I don't see a way to correct it? I bought a new home in October 2024, and sold my old house after moving out in February 2025. I had a loan of 550,000 on the old property for the full year and 652,000 on the new property for 2.5 months. However, turbo tax reported 1,202,000 over the 750,000 threshold. and I was limited to 65% of the mortgage interest however it should have been (550,000 *12 + 652000*3)/12 = 713,000 average mortage debt and not capped at all. What should I do and how do I fix the calculation in turbotax?

[RobertB4444]

First, log in to your TurboTax account and go to the 2024 return.  Click the amend button.  Here are some more detailed instructions for amending your 2024 return.

Then, once you are in the return, go back to the 1098 forms that you entered.  Go to the 1098 form for the house that you sold and just delete the balance owed.  Change it to zero.  

That will fix the deduction issue and if you are due a refund because of the larger deduction the system will calculate it for you.

In reason for amending just put that the "mortgage interest deduction was incorrectly capped".

@alex-jones