I guess the quandary is that my mom back in 2003 took the reverse mortgage to pay off the mortgage she had on the house (around $80,000 originated in 1985) and took extra money from the reverse mortgage for improvements: to add a double garage, finish the basement and add a bathroom. The initial reverse mortgage draw came to around $200,000 ($80k to pay off mortgage and $120k for improvements). In 2020 when she passed, the loan amount to be paid off was around $360,000 which I paid off. The interest came to around $130k. Knowing these facts, do you think this changes the deductibility of the mortgage interest?
