We have an unusual situation with the mortgage interest deduction limit. We moved late in the year; as a result, we had two mortgages, #1 and #2. #1 was most of the year and had a typical amount of interest. #2 was late in the year, and as a result had a relatively high balance with almost no interest paid. Mortgage #1 is easily under the debt limit from publication 936; #2 isn’t.

Because of this, when we fill out table 1 in publication 936, much of mortgage #1’s interest gets disallowed. #2 adds debt but almost no interest.

I notice that publication 936 defines main home and second home like this:

Main home. You can have only one main home at any one time. This is the home where you ordinarily live most of the time.

Second home. A second home is a home that you choose to treat as your second home.

May we just… NOT “choose to treat” #2 as our second home? If it is omitted the overall effect is positive, since much more of #1’s interest is allowed and #2 had very little interest anyway.

  • do you still own house #1, or did you sell it in 2022? Apr 4 at 15:37
  • Still own, in escrow to sell
    – sideband
    Apr 4 at 16:10
  • Does this help? money.stackexchange.com/questions/149594/…
    – littleadv
    Apr 4 at 16:19
  • @littleadv Not directly. I was already computing the average balances as you describe in that post, though it is helpful to get confirmation that I did it right. With average balances computed that way, the problem is still roughly as described in the post.
    – sideband
    Apr 4 at 16:31
  • To ask it succinctly: the definition of second home is a property you choose to treat as one. For instance, if you had 3 homes, you’d have to leave one off and pick one as the second. Since you can choose whether to designate a home as your second home, if doing so is disadvantageous, may you choose NOT to?
    – sideband
    Apr 4 at 17:18


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