Welcome back! Ask questions, get answers, and join our large community of tax professionals.
cancel
Showing results for 
Search instead for 
Did you mean: 

Does the calculation for the home mortgage average balance (for interest limitation) seem wrong?

LisaPap
Level 3

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.

0 Cheers

This discussion has been locked. No new contributions can be made. You may start a new discussion here