No, interest paid on a reverse mortgage is not deductible. However, you can deduct the mortgage interest from the refinanced loan if it is secured by the house inherited from your father. It could be considered your second home and would be allowed if you itemize deductions.
Reverse Mortgage According to IRS: (IRS Publication 936)
A reverse mortgage is a loan where the lender pays you (in a lump sum, a monthly advance, a line of credit, or a combination of all three) while you continue to live in your home. With a reverse mortgage, you retain title to your home. Depending on the plan, your reverse mortgage becomes due, with interest, when you move, sell your home, reach the end of a pre-selected loan period, or die. Because reverse mortgages are considered loan advances and not income, the amount you receive isn't taxable. Generally, any interest (including original issue discount) accrued on a reverse mortgage is considered interest on home equity debt and isn’t deductible."
The standard deduction is shown below for your convenience. If your itemized deductions are greater than the standard deduction then you should use those. The expenses most commonly associated with itemized deductions is medical expenses greater than 7.5% of your income, property taxes, state and local income tax or sale tax, mortgage interest and donations.
For single taxpayers and married individuals filing separately, the Standard Deduction is $13,850 in 2023.
For married couples filing jointly is $27,700, and
For heads of households, the Standard Deduction is $20,800
If you're at least 65 years old or blind, you can claim an additional deduction in 2023 of:
- $1,850 for single or Head of Household
- $1,500 for married or Qualified Surviving Spouse.
If you're both 65 and blind, the additional deduction amount is doubled.
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