Hi,

A taxpayer has a home secured by a mortgage with a principal balance of $400,000 and a HELOC with a balance of $100,000 both loans originated in 2016 before TCJA.  He purchased a new home in 2019 with a new $600,000 loan.  He lives in the new house and started renting out the first house in 2019.  Since the first house is now a rental property reported on schedule E, can he deduct all of the interest on the new loan interest on schedule A and all of the previous loans on schedule E? - or is he limited by $750,000 cap and can only deduct interest on the first $250,000 of the $600,000 loan?

Thank you for your help