Michael G. Branson, CEO of All Reverse Mortgage, Inc., and moderator of ARLO™, has 45 years of experience in mortgage banking, with the past 20 years devoted exclusively to reverse mortgages. A Forbes Real Estate Council member, he developed the industry's first fixed-rate jumbo reverse mortgage and has been featured in Forbes, Kiplinger, the LA Times, and Yahoo Finance. (License: NMLS# 14040)

Cliff Auerswald, President of All Reverse Mortgage, Inc., and co-creator of ARLO™ — the industry's first real-time reverse mortgage pricing engine — has 27 years of experience in mortgage banking, with 20+ years focused exclusively on reverse mortgages. A recognized expert in reverse mortgage technology and consumer education, he has been featured in Kiplinger, Yahoo Finance, Realtor.com, and HousingWire. (License: NMLS# 14041)

How to Deduct Reverse Mortgage Interest & Other Costs

By Michael G. Branson

CEO · 45 yrs in mortgage banking

Edited By Cliff Auerswald

President · All Reverse Mortgage Inc.

Updated Aug 18, 2021 ⏱ 3 min read ✓ Fact Checked HUD-Lender #26031-0007 54 comments

Table of Contents

• Tax Benefits of Reverse Mortgages: What’s Deductible?

• Intangible Taxes May Be Deductible

• Deducting Interest Payments

• How Payments Are Applied

• Tax-Deductible Reverse Mortgage Costs

• Interest Deduction FAQs

Tax Benefits of Reverse Mortgages: What’s Deductible?

Similar to a conventional mortgage, some costs associated with a reverse mortgage are tax-deductible, as are interest payments a borrower chooses to make. Joe Diaz, owner of American Essential Services, a tax preparation company in Kissimmee, Florida, explains that borrowers can claim origination fees, broker fees, and even “discount points” if a broker offers a lower interest rate in exchange for an upfront fee. “The discount point is tax-deductible because it’s a prepaid interest cost,” Diaz notes.

Here’s how it works: A broker provides a loan at the bank’s “par” rate (no fee to the broker). If a borrower requests a lower rate, the broker may charge “points” upfront to offset the reduction. These points qualify as a tax deduction.

Intangible Taxes May Be Deductible

In states like Florida, borrowers can also deduct the “intangible fee” associated with reverse mortgages. Diaz advises, “Save your final settlement statement—it lists all fees. The IRS doesn’t always get accurate reports, so you’ll need proof at tax time.” These deductions can be claimed on Schedule A of Form 1040.

Deducting Interest Payments

While reverse mortgages don’t require monthly payments, making optional interest payments can help manage your loan balance—and unlock tax benefits. Per the IRS, “Interest accrued on a reverse mortgage isn’t deductible until it’s paid, typically when the loan is fully repaid.” If you pay the interest, it’s fair game for a deduction.

Diaz adds, “If no payments are made, the IRS won’t receive a report of paid interest from the lender. You must actively pay to claim it.” Alternatively, heirs who settle the loan after the borrower’s death can deduct the interest they pay, up to a $100,000 limit, as noted by Michael Darrett, CPA at Liberty Tax Services in Chicago, IL. The IRS classifies reverse mortgage debt as home equity debt, capping deductions accordingly.

How Payments Are Applied

When you make payments on a reverse mortgage, they’re applied in this order:

Accrued mortgage insurance premiums
Monthly servicing fees
Accrued interest
Principal balance

Borrowers receive a Form 1098 statement—detailing premiums and interest paid—when the loan is partially or fully repaid. These statements, mailed each January, are essential for tax filing.

Tax-Deductible Reverse Mortgage Costs

Cost	Tax-Deductible?	Conditions
Origination Fees	Yes*	Claimed in the year paid, listed on settlement statement
Broker Fees	Yes*	Claimed in the year paid, listed on settlement statement
Discount Points	Yes*	Deductible if paid upfront for a lower interest rate
Intangible Fees	Yes* (in some states)	E.g., Florida; verify with your state and save settlement statement
Interest Payments	Yes*	Deductible only when paid, not accrued; capped at $100,000 for home equity debt
Mortgage Insurance Premiums	No (unless paid)	Deductible only if paid, as part of repayment

*The experts at All Reverse Mortgage can provide general information regarding which fees the IRS will allow borrowers to deduct (depending on their circumstances) but your individual situation will determine your tax liabilities and what you can ultimately deduct on your taxes. We are not licensed to give tax advice and cannot provide specific information for all borrowers. Always contact your trusted tax professional to get advice on your taxes.

Interest Deduction FAQs

How does a reverse mortgage affect your taxes?

A reverse mortgage is not income; it is borrowed money, which is like any other loan. Borrowers need to consult their own CPA/tax professional for their circumstances.

Do you get a 1098 on reverse mortgage interest?

You do get a 1098, but only when the interest is paid. For more information on tax matters, borrowers should consult their own CPA/tax professional for their circumstances.

Do Reverse Mortgages count as income?

The funds you receive from your reverse mortgage are borrowed funds; they are not earned income.

Is any reverse mortgage costs tax deductible?

The reverse mortgage is a home loan, like any other. To determine the exact deductibility of any specific expenses, borrowers should consult their own CPA/tax professional for their circumstances.

Who pays property taxes on a reverse mortgage?

You always own your home and are responsible for your taxes, insurance, and property maintenance.

The experts at All Reverse Mortgage are here to answer your questions, but we cannot provide specific tax advice. Always contact your trusted tax professional to get advice on your taxes.

Also, See:

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Have a Question About Reverse Mortgages?

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Post your question in the comments below and anticipate a personalized response from Mr. Branson himself, typically within one business day. He's here to illuminate all angles of reverse mortgages, ensuring you're equipped with the knowledge to make informed decisions. Take this opportunity to gain insights from a seasoned professional.

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54 Comments on this Article

Karen M.
March 26th, 2026

"Tax-Deductible Reverse Mortgage Costs Cost Tax-Deductible? Conditions Origination Fees Yes Claimed in the year paid, listed on settlement statement Broker Fees Yes Claimed in the year paid, listed on settlement statement Discount Points Yes Deductible if paid upfront for a lower interest rate Intangible Fees Yes (in some states) E.g., Florida; verify with your state and save settlement statement Interest Payments Yes Deductible only when paid, not accrued; capped at $100,000 for home equity debt Mortgage Insurance Premiums No (unless paid) Deductible only if paid, as part of repayment" ... What are the sources for this information provided on your website?
Reply to Karen
- Michael Branson
  March 26th, 2026
  
  Hello Karen,
  We cite the tax professional from whom we received the information in the article as well as linking to the IRS website. However, I would like to stress that we also remind borrowers the same thing that Joe Diaz of Essential Services said to us, that while the IRS allows deductions for the items as we quoted him, everyone's tax situation is different. This information we post is a guide only as costs to consider and to discuss with your tax accountant, it is not tax advice.
  Every borrower should consult with a competent tax professional and if you paid any of those items, be sure to bring them up during your meeting to see if your circumstances will benefit from the additional allowable deductions. Not only are we not accountants, but we could not begin to post the items that would pertain only to each and every borrower, especially since tax laws change and everyone's circumstances are different.
  Bottom line, let me reiterate. Please use this as a guide for possible items to ask your CPA about if you paid them in the course of your loan or ask your tax professional if they will help your situation before you pay them if you are contemplating paying additional fees or interest as a tax strategy. But do not use this information solely as your basis for any actions. Always consult with your tax professional to determine your tax strategies. We won't give you legal or medical advice either but if we see any credible information we just might cite the source and pass it along. ;>)
  Reply to Michael
John
April 9th, 2025

Can I still deduct the property taxes I paid for 2024 if I have a reverse mortgage?
Reply to John
- Michael Branson
  April 9th, 2025
  
  Hello John,
  I can't provide tax or legal advice, but I can tell you that having a reverse mortgage doesn't affect your ability to deduct property taxes any more than any other type of loan. If you paid the taxes and are otherwise eligible to deduct them under IRS rules, the reverse mortgage has no impact on that deduction.
  For example, while I can't speak to specific state rules, I do know there are caps on the amount of property taxes that can be deducted, and there may be different rules depending on whether you're filing jointly, separately, single, or married. That's why I say, "if you have the right to deduct them...”
  I strongly recommend consulting with a licensed tax professional to ensure you receive every deduction you're entitled to.
  Reply to Michael
Roz
January 8th, 2025

I had a reverse mortgage for 7 years and paid it off in 2024. The total interest I paid was approximately $13,000, and the MIP was approximately $3,100. Can I deduct all of the interest and MIP charges on my income tax this year? Are any of the setup fees deductible?
Reply to Roz
- Michael Branson
  January 8th, 2025
  
  Hi Roz,
  I cannot provide tax advice. In fact, mortgage licensing law prohibits licensees from offering tax or legal advice unless they are licensed to do so and providing that advice in accordance with those licenses. Additionally, I do not know your specific circumstances, so I would not be the right person to discuss what deductions you may be eligible for based on your income, filing status, deductions, and other factors.
  While tax law may allow certain deductions, your individual circumstances - such as filing status and other considerations - may determine whether those deductions are feasible for you. I do not want to give you inaccurate information, as I simply do not have the details necessary to make that determination.
  What I can share is that any deductions you are entitled to are generally available in the year the expenses are paid. I strongly recommend speaking with your accountant or tax professional to clarify the deductions you may claim for these expenses. Since you paid these amounts in 2024, even though some expenses accrued in prior years, it is worth discussing with your tax professional before filing your 2024 tax returns.
  I hope this helps!
  Reply to Michael
Bob
September 9th, 2023

Hi Arlo,
If a beneficiary pays off a reverse mortgage, what IRS provision allows them to take the accrued interest off their personal tax return versus the decedents estate tax return?
Reply to Bob
- Michael Branson
  September 9th, 2023
  
  Hello Bob,
  We have gotten this question more than once lately, and all we can do is refer you to your tax professional. We are not CPAs or Tax professionals, and as such, we can pass along information we have received from licensed CPAs, such as we did in August of 2021 when we quoted Michael Darrett, a CPA in Chicago at Liberty Tax Services and at that time, he stated that heirs could claim interest in the year they pay it (with limitations).
  There are articles on the internet now about 1098's being prepared in the borrower's name and with the borrower's social security number, but the heir needs to show specific proof to the IRS about their paying that interest and something about the interest the heir is claiming was not reported to the IRS on a 1098 form under their social security number and why, but I have no knowledge of these matters and therefore cannot advise you.
  These are tax matters, and as a licensed mortgage professional, I am forbidden by licensing law to give tax advice. I honestly do not know what you need to do or how you need to inform the IRS. You must contact a licensed tax professional knowledgeable in this area to receive the guidance required to file the correct tax information with the IRS.
  Reply to Michael
Madana
August 10th, 2023

I bought a property at HOA foreclosure, and hence title was issued in my name. The property has a reverse mortgage that the previous owner took. The bank will probably foreclose soon. Will I be responsible for anything, including any tax implications? Like 1099 A or C will have my name once foreclosed?
Reply to Madana
- Michael Branson
  August 10th, 2023
  
  I am so sorry to hear this. More and more buyers have been buying homes at auction only to find out that other liens are superior to the HOA lien, of which purchasers were unaware at the time they thought they were getting a great deal on a property, only to find out that they had other liens that were also on the property about which they knew nothing when they purchased the home. It is not the duty of the lienholder performing the HOA auction to do a title search for other liens or even to disclose the presence of any other liens. This is why it is so important to do a thorough title investigation on any property before you purchase at auction.
  I cannot give answers to your specific questions that would constitute legal or tax advice. We are forbidden by licensing law to give any legal or tax advice. In this case, you should contact a tax attorney or CPA to determine what you need to do to ensure you do not suffer any more damage from this unfortunate situation.
  Reply to Michael
Debra B.
June 26th, 2023

Why do heirs receive a 1099 on a reverse mortgage and not HUD to receive the proceeds, and will that 1099 affect those on disability or retirement?
Reply to Debra
- Michael Branson
  June 26th, 2023
  
  Hello Debra,
  Not being an accountant or even a tax professional, I am not equipped to provide tax guidance. Not only am I not educated on the tax laws, but I am also explicitly forbidden to try to give tax advice under mortgage banking licensing. And I would not attempt to give any opinions about disability or retirement programs I know nothing about. But why are you concerned that they would be affected by a loan you did not agree to repay on a property you did not own? The 1099 is in your relative's name, right?
  The reverse mortgage is a non-recourse debt, and you never agreed to pay anything for the loan. Contacting a tax professional to determine the best course of action is your best avenue. I still would not put it off; a quick call would probably answer your questions, and while I cannot understand the information presented, I don't think you will be unhappy with the answers you receive.
  Reply to Michael
Terri W.
April 4th, 2023

Hello Arlo,
My mother-in-law had a reverse mortgage for 15 years and recently sold the property. The loan balance of $285,000 was paid off from the $485,000 sale. Was the remaining equity taxable on her end? Thanks!
Reply to Terri
- Michael Branson
  April 4th, 2023
  
  Hello Terri,
  
  I am sorry, but licensing law does not allow us to provide legal or accounting (tax) advice. Also, everyone's situation and circumstances are different, and you really need to speak with your qualified tax professional.
  I know that when we sold my mom's house, they also took things like the cost of capital improvements, the interest that was paid on the loan at closing, and other things into consideration so there is a lot more than just the difference between the sale price and the amount owed that the accountant needed to consider.
  There might also be an exemption of up to some amount for married or single individuals that would be applied so you really would benefit by seeking assistance from a knowledgeable tax professional.
  Reply to Michael
Sandy
April 3rd, 2023

Hi ARLO,
My mother passed away, and the home had a reverse mortgage. We did buy the home and paid off the reverse mortgage. My question is, in this loan payoff, a ton of interest was paid.
Do we get to use any of this as a tax deduction? If so, where do we begin? I've been trying to research this but have not found anything. I appreciate your help.
Reply to Sandy
- Michael Branson
  April 3rd, 2023
  
  Hello Sandy,
  
  Licensing laws forbade us from giving either tax (accounting) or legal advice. I can tell you honestly that I would not even try to provide tax advice because not only does our licensing forbid it, but I cannot stay on top of all the changes.
  Your circumstances also may affect your ability to use certain deductions (which I have no way of knowing). The best information I can give you here is advice to consult a knowledgeable accountant or tax attorney who can review your circumstances and 1098 from the lender and let you know what deductions are available.
  Reply to Michael
Spencer S.
February 11th, 2023

Hello Arlo,
My dad received a 1098 for mortgage interest. He and my mom passed in 2021. I was/am the trustee of their estate and the sole beneficiary. My wife and I refinanced their reverse mortgage into a traditional mortgage for ourselves. Once the reverse mortgage was paid off by our refi, the mortgage interest for the reverse was also paid. Can I/we claim some/all of the mortgage interest on my taxes, as the entire reverse mortgage, including the interest, is/was paid by us with our new, traditional mortgage thru the refi?
Reply to Spencer
- Michael Branson
  February 11th, 2023
  
  Hello Spencer,
  
  I am sorry but I must refer you to your tax preparer or accountant for this answer. Mortgage licensees are forbidden by licensing laws to give tax or legal advice unless they also hold those licenses and then can only do so if they are acting in that capacity (not under their mortgage banking license).
  Not only do the laws prohibit me from answering tax questions but it is also in your best interest to check with your tax specialist as things may be such with your circumstances that make your situation different than someone else's and I would not want to give you bad information.
  Reply to Michael
Pam P.
January 12th, 2023

I've been paying $450.00 dollars a month on my reverse mortgage towards the interest for the past 10 years. When can I claim it on my taxes?
Reply to Pam
- Michael Branson
  January 12th, 2023
  
  Hello Pam,
  
  I am not an accountant and cannot give you accounting advice. My understanding is that interest is deductible when paid. You should have been receiving a monthly statement and a yearly statement from the servicer/lender this whole time.
  Remember, any payments made will be applied in accordance with the schedule the lender gave you when you first received the loan and as outlined on your legal documents. According to the Promissory Note, any prepayments received from the borrower shall be paid based on the schedule below:
  
  Based on this method, the lender will first use the money you paid to pay the mortgage insurance premiums, next any servicing fees, then to interest and then to lower the principal balance owed. The monthly and annual statements you received from the servicer should identify those payments and how they were applied.
  
  Some borrowers see that not all the money goes immediately to interest or principal balance and are discouraged but ultimately it still helps you. Interest accrues on the outstanding balance of the loan and anything you pay keeps that much from being added to the balance owed and therefore from accruing interest.
  Check with your accountant to determine what can be deducted and when. If it is your goal to sell one day you will be pleased when the balance is that much lower, then. If your goal is to leave the largest asset to your heirs, they will thank you for it.
  Reply to Michael
  - Pam P.
    February 2nd, 2023
    
    This information was so helpful. Thank you so much for answering my question in such detail!
    Reply to Pam
Bob P.
November 27th, 2022

Hi Arlo, In March 2022 we refinanced our Reverse Mortgage with a new Reverse Mortgage. The new reverse mortgage paid off the old Reverse Mortgage which included about $17K of deferred interest. Should we receive a 1098 (in 2023) showing the interest paid (the $17K by the new Reserve Mortgage)?
Reply to Bob
- Michael Branson
  December 7th, 2022
  
  Hello Bob,
  You should receive a statement for the interest paid on the loan that was paid in full. You can contact the servicer and let them know you did not get it and ask them if it will be going out with the year-end statements.
  Reply to Michael
  - Peter F.
    January 31st, 2023
    
    Novad was my loan servicer and I paid my reverse mtg off this year, 2022. How long does it take to get a 1098 from Novad?
    Reply to Peter
    - Michael Branson
      February 11th, 2023
      
      Hello Peter,
      
      I do not know when NOVAD sent or plans to send out the required tax forms, but I do know that they are required to be sent to tax payers by the end of January in the filing year. This means that if they have not yet sent it, they should have it out by today, January 31, 2023, for statements for the 2022 tax year.
      I know that NOVAD has a specific email address for reverse mortgages on their site which is hecm.servicing@novadconsulting.com and they post a phone number of (877) 622-8525 so I would suggest you contact them to ask if they have gone out or at least do so if you do not receive it in the next week or 10 days.
      Reply to Michael
David C.
October 10th, 2022

Are fees paid when I get a reverse mortgage tax deductible ? Not interest but fees, is it income adjusted?
Reply to David
- Michael Branson
  October 13th, 2022
  
  Hello David,
  
  Please don't take this as dodging your question, but we are prohibited from answering legal or accounting/tax questions. What may be true for some borrowers may not be true for others and am not a licensed attorney or tax professional.
  By licensing law, unless I am licensed to give the type of advice I would be rendering (tax or legal) and am doing so because of that licensed work and not in conjunction with my mortgage licensing activities, I am forbidden by licensing law to render an answer.
  Unfortunately (or maybe fortunately for you because I am not up on all the tax laws, and they are ever-changing) I must answer in the same manner as I always do when queried about legal or tax issues. I am sorry, but you must contact your legal or tax professional to see how this would affect you as it relates to your specific circumstances.
  Reply to Michael
Pamela P.
September 14th, 2022

I've been paying $450 a month interest payment on my reverse mortgage since I took it out. How and when will I be able to claim some or all of it?
Reply to Pamela
- Michael Branson
  September 14th, 2022
  
  Hello Pamela,
  
  Your loan documents state the order in which your payments will be applied as it relates to Mortgage Insurance, Fees, Principal, Interest, etc. The payments you make will be applied to those items as outlined in your loan documents and will be shown on your monthly statements.
  As far as when you can deduct certain items paid, you really need to speak to your tax professional because that is an income tax question that will depend on the tax laws as well as your filing status and I cannot give you tax advice.
  
  I can also tell you that your interest accrues on the total outstanding balance. So no matter what the total tax implication is, any payments you make help you in the long run because it reduces the amount of money you owe and on which the interest accrues.
  Therefore, the interest that accrues on the outstanding balance of the loan will accrue on a lower balance because you are paying down the balance by making the payments you describe. That means that if you choose to sell the home and move, you will have more equity later. If you stay there for the rest of your life and your heirs wind up selling the home after you pass, you will leave them more equity.
  The bottom line is that there are more benefits than just possible tax write offs to making payments when you can but I would still check with my accountant or tax professional if I was you because interest and any other allowable deductions should be deductible when paid and there is no reason you should not get any benefits to which you are entitled.
  Reply to Michael
Errol H.
August 1st, 2022

Info was very, very helpful thank you.
Reply to Errol
Jeanie B.
March 2nd, 2022

When a reverse mortgage is refinanced into another due to lower interest rates, increase in home value or both, the borrower gets a 1098 Mortgage Interest statement showing all the past interest and mortgage insurance that was not deductible because it was paid with loan proceeds. Why would the borrower receive the statement since these past expenses are now being paid with new loan proceeds?
Reply to Jeanie
- Michael Branson
  March 2nd, 2022
  
  Hello Jeanie,
  
  Whether you paid the interest on the old loan with money out of your pocket or with other refinanced funds, you did pay the interest on that loan and the 1098 was issued to you.
  You definitely should contact your tax professional to determine how this affects your circumstances under the tax laws so that you get all the deductions you deserve!
  Reply to Michael
Patrick S.
February 16th, 2022

Hi ARLO,
I have a 10 year old reverse mortgage. Is all of the deferred interest and mortgage insurance premiums a tax write off when I sell the house? The same question as above: Should I die, my children will inherit the house. Will they be able to write off the deferred interest and Mtg premiums on my reverse mortgage? Thank you.
Reply to Patrick
- Michael Branson
  February 16th, 2022
  
  Hello Patrick,
  
  I cannot give you tax or legal advice and everyone's accounting situation is different regarding their deductions. I can tell you that deductions are usually available when paid (which would be when the loan is paid off) but as to your specific circumstances, you really need to speak to your tax professional to determine what you can and cannot write off based on the current tax laws.
  Reply to Michael
  - Sandra T.
    April 23rd, 2022
    
    When I sell my house is any of the interest a deduction against the capital gains owed?
    Reply to Sandra
    - Michael Branson
      April 27th, 2022
      
      Hello Sandra,
      
      Interest is usually deductible when paid so when you sell your home and pay the loan off, that is typically when you would receive your tax form from the lender.
      However, I am not an accountant and I cannot give you tax advice so I am not going to tell you how that would be treated in your instance for taxes (deduction against capital gains or what). You need to speak to your tax professional for this information but you are correct about the timing.
      Reply to Michael
Jon M.
February 9th, 2022

Is the interest on a reverse mortgage deductible if the loan is paid off with another reverse mortgage?
Reply to Jon
- Michael Branson
  February 9th, 2022
  
  Hello Jon,
  
  I am sorry, I am forbidden by licensing law to give legal or accounting advice. And since tax laws change constantly and different people are affected differently by those changes, not being a licensed attorney or accountant, I am actually in favor of these restrictions. I must refer you to your accountant or tax attorney to determine the tax treatment of any interest you must pay for your circumstances.
  Reply to Michael
Allen K.
February 6th, 2021

If I refinance a reverse mortgage that I have had for 6 years, can I deduct the interest and mortgage insurance in its entirety? The accrued interest is $82,299 and the accrued mortgage insurance is $23,829. Thank you.
Reply to Allen
- Michael Branson
  February 9th, 2021
  
  Hello Allen,
  
  Interest is deductible when actually paid. How much is deductible in your case would be determined by your circumstances and tax laws. For that, you really need to consult with an accountant or tax attorney to determine specific amounts for which you would be eligible to deduct.
  Reply to Michael
Jeff J. Lewis
January 29th, 2021

One of the best and comprehensive article on How to deduct Reverse Mortgage Interest & Other Costs, I am bookmarking it so I can read it again. Thank you Michael G. Branson, You really inspired me to learn more.
Reply to Jeff
Alan M.
March 19th, 2020

Are mortgage insurance premiums appearing on 2019 1098 for a reverse mortgage that has been paid off tax deductible?
Reply to Alan
- Michael Branson
  March 24th, 2020
  
  Hello Alan,
  Borrowers really need to talk to their tax professionals for tax advice. We are forbidden by licensing laws to give tax or legal advice and could not possibly know all circumstances for everyone who inquires. For these reasons, I really must refer you to your tax professional for this answer as it relates to your circumstances.
  Reply to Michael
Chris
March 6th, 2020

a HECM LOC rep mentioned that the current tax code allows for taking IRA money, paying the tax, but using that money to pay down the HECM, receiving a tax deduction for the "mortgage interest" effectively getting your IRA money tax free, or at least on a very tax favored basis. Do you agree?
Reply to Chris
- Michael Branson
  March 6th, 2020
  
  Hello Chris,
  
  I do not agree with any Loan Officer giving you tax advice and I will not either. For the same reason I would not take legal advice from my plumber, I would not suggest that you take tax advice from a loan officer. Aside from the practicality of the advice, in most states giving legal or accounting advice with a lending license is strictly forbidden by the licensing laws.
  What I would suggest to you though is that if you think this idea sounds like something that might be an interesting consideration in your case, contact your tax professional to determine if this is a viable option for you and what ramifications might occur as a result from both the state and federal aspect.
  Reply to Michael
Greg
September 10th, 2019

Will I get a form 1098 for interest from a reverse mortgage like I do for a standard mortgage? If not, can I declare any interest on my schedule A of my federal tax return?
Reply to Greg
- Michael Branson
  September 10th, 2019
  
  Hello Greg,
  
  You must remember that interest accrues on the loan, but most borrowers do not pay it until the end of the loan. Therefore, there would be no 1098 until a payment of interest is made.
  About the ability to deduct interest, the laws have changed substantially, they affect different taxpayers differently in accordance to their filing status and by licensing law, we cannot give tax or legal advice.
  I really must refer you to your tax professional or tax attorney for tax information and what you can do under your circumstances.
  Reply to Michael
Greg
May 15th, 2019

Can I include the debt from a reverse mortgage on schedule I (rev form 1512) of the inheritance tax form?
Reply to Greg
- Michael Branson
  May 15th, 2019
  
  Hi Greg,
  
  I am sorry but for tax and legal advice, you really must seek the counsel of qualified professionals in those fields. We are not allowed by licensing law to provide tax or legal advice and so I really must direct you to your CPA or other tax professional for this information.
  Reply to Michael
David Nadler
April 18th, 2019

My mother took out a reverse mortgage many years ago and paid it off last year when she sold her condominium. There was acquisition debt and now, it seems, she can deduct all the interest she paid on that debt. Does that include compounding? To keep things simple, let's say that the annual interest rate was 2.4 % and the acquisition debt was $100,000. My interest payment in the first month was $200 and that is all deductible. But it also gets added to the loan balance. In the second month, the balance is now $100,200. The interest for the second month is $200.40. Is that entire amount deductible, or only the $200? It doesn't sound like a big difference for the first two months, but I think it might add up to something over 10 years or more. I think that we must find all her monthly interest rates (average weekly 1-year Treasury) over the life of the loan and calculate the interest attributable only to the acquisition debt, because she also did from time to time take money out. The question is whether the compounded interest on the acquisition debt is deductible -- I certainly hope that at least the simple interest is.
Reply to David
- Michael Branson
  April 19th, 2019
  
  Hello David,
  
  If you will note, in the article on which you commented, we were careful to quote a tax professional and to give a qualifying statement that all borrowers need to consult with their own tax professionals for tax advice. We do this to stay in compliance with licensing laws even though we strive to bring the most information to borrowers that we possibly can. We try to let borrowers and their families know as much as we can about the interest aspect of the loan and their need to talk to a tax professional for specifics. I would again advise you to speak with your CPA or tax attorney for specific advice as it relates to your circumstances.
  Reply to Michael
Tom Davison
March 31st, 2016

The discussion about amounts of interest that can be deducted need to be revised. Two different issues: (1) a reverse mortgage can include acquisition debt as well as home equity debt. Acquisition debt comes from using a reverse mortgage to buy a house, or refinancing debt that was acquisition debt. The limits on deductions for acquisition debt are far higher than for home equity debt. (2) The limit on home equity interest deduction is not $100,000 of interest, but rather the interest on $100,000 of home equity debt. The interest on that debt could, over many years, be substantially higher than $100,000. This is a common confusion. Think about a $100,000 HELOC - all the interest on it would be deductible. Read the IRS documents carefully with attention to the words debt and interest.
Reply to Tom
- Tom Gilmer
  August 17th, 2016
  
  We purchased a new home in October, 2014 using a reverse mortgage to acquire the property. On December 31, 2014 the principal balance on the reverse mortgage was $391,573.
  In December,, 2015 we paid off the reverse mortgage balance and took out a conventional home mortgage.
  We received a 2015 Annual Year-End Statement showing that the Interest accrued on the reverse mortgage in 2015 was $19,510, that the MIP paid to HUD was $4,820 and that the repayment made was $415,903. No other amounts shown on this form.
  I am confused as to how to determining the amount that is tax deductible on our 2015 Form 1040, and on our California Form 540 tax returns. Can someone provide clarification or direct me to a source for a definite answer?
  Reply to Tom
Edith Anne
May 20th, 2013

Very helpful information.
Reply to Edith

See What Your Home Could Do for You

How to Deduct Reverse Mortgage Interest & Other Costs

Tax Benefits of Reverse Mortgages: What’s Deductible?

Intangible Taxes May Be Deductible

Deducting Interest Payments

How Payments Are Applied

Tax-Deductible Reverse Mortgage Costs

Interest Deduction FAQs

How does a reverse mortgage affect your taxes?

Do you get a 1098 on reverse mortgage interest?

Do Reverse Mortgages count as income?

Is any reverse mortgage costs tax deductible?

Who pays property taxes on a reverse mortgage?

The experts at All Reverse Mortgage are here to answer your questions, but we cannot provide specific tax advice. Always contact your trusted tax professional to get advice on your taxes.

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See What Your Home Could Do for You

How to Deduct Reverse Mortgage Interest & Other Costs

Tax Benefits of Reverse Mortgages: What’s Deductible?

Intangible Taxes May Be Deductible

Deducting Interest Payments

How Payments Are Applied

Tax-Deductible Reverse Mortgage Costs

Interest Deduction FAQs

How does a reverse mortgage affect your taxes?

Do you get a 1098 on reverse mortgage interest?

Do Reverse Mortgages count as income?

Is any reverse mortgage costs tax deductible?

Who pays property taxes on a reverse mortgage?

The experts at All Reverse Mortgage are here to answer your questions, but we cannot provide specific tax advice. Always contact your trusted tax professional to get advice on your taxes.

Have a Question About Reverse Mortgages?

Over 2000 of your questions answered by ARLO™ Ask your question now!

Leave a Reply to This Article

See exactly how much you qualify for — with zero pressure.

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