Unfortunately realizing this late, as a client now owes more money, but in a situation where the taxpayer had mortgage debt in excess of the limitation and sold the house in August, when I completed the worksheet showing the Jan 1 beginning principal, then the Aug balance as 0, the average was a lower number than should have been used and no limitation was applied. I see from an Intuit article (Understanding Excess Home mortgage Interest for Individuals Schedule A) that the calculation takes beginning + ending of 0 , then divides total by 2, then applies the ratio of months held over 12. Which gives a MUCH lower figure than Pub 936 would give, where the method involving a payoff is to get monthly averages and then average those. Result is very very different. Wondering if ProSeries can address this because it seems like a problem with the program.
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