Folks:

Clients purchased their residence before 2017 and purchased a second home in 2020.  Debt on House1 is $650,000 and debt on House2 is $450,000.

If Clients claim a deduction for home interest on House1, their net tax obligation is X.

If Clients also claim a deduction for home interest on House2, their net tax obligation is is >X.  It increases because of the proportionate allocation of the deduction associated with the cap of $750,000 on deductible home debt.

Are clients required to seek the deduction on interest paid for House2?  Does the pro rata apply even if they don't do so?

Thanks.

Micah