@PoconoRick here is the broader challenge:
since a reverse mortgage is home equity debt, unless the payments to your Mom were used to buy, build, or substantially improve the home that secures the loan, the interest, when paid, is not deductible!
can you substantiate that the money she received each month was NOT used for normal living expenses and in fact was used to buy, build or substantially improve the home?
so this could simplify all your questions as none of the interest may be deductible by any party.
https://www.irs.gov/faqs/other/for-senior-taxpayers/for-senior-taxpayers
