I got an IRS notice CP28A stating that I've claimed too much mortgage interest deduction. Could the knowledgeable folks here kindly provide some guidance on the calculation. Please see pertinent information below.
Background:
I moved from Property 1 to Property 2 in 2024. After moving from Property 1 to Property 2, Property 1 was sold on October 10, 2024. I had 3 mortgages in TY2024 with different interest payments and loan balances. All three loans are acquisition indebtedness and had no points or prepaid interest.
Loan 1 was secured by Property 1:
Origination date: Oct 18, 2021 (loan was originated to refinanced a loan from 2015 that was paid off by the refinance, entire loan amount was used for mortgage or home improvement)
Beginning loan balance on Jan 1, 2024: $534,797.84
Ending loan balance on October 10, 2024: $512,207.44
Loan was paid off on October 10, 2024
Interest rate: 2.625%
Mortgage interest paid in 2024 from 1098: $11,651
Loan 2 was secured by Property 2:
Origination date: May 17, 2024
Date paid off: Dec 2, 2024
Beginning loan balance: $2,981,536.86
Ending loan balance: $2,972,913.72
Interest rate: 6.25%
Mortgage interest paid in 2024 from 1098: $96,794.52
Loan 2 was paid off on December 2, 2024 via a refinance (Loan 3)
Loan 3 was a refinance of Loan 2 and was secured by Property 2:
Origination date: Dec 2, 2024
Outstanding through: Dec 31, 2024
Beginning loan balance: $2,812,500
Outstanding balance on Dec 31, 2024: $2,812,500
Interest rate: 5.5%
Mortgage interest paid in 2024 from 1098: $11,866.4
