topic Can I deduct mortgage insurance premiums on a reverse mortgage? in Deductions & credits

Can I deduct mortgage insurance premiums on a reverse mortgage?

lew4219 — Wed, 05 Jun 2019 19:01:48 GMT

It depends. You can deduct amounts you paid for qualified...

KatrinaB — Wed, 05 Jun 2019 19:01:49 GMT

It depends. You can deduct amounts you paid for qualified mortgage insurance premiums on a reverse mortgage. However, the insurance contract must have been issued on January 1st of 2007 or later, and that the reverse mortgage debt itself must be classified as acquisition indebtedness and not home equity indebtedness.

Re: It depends. You can deduct amounts you paid for qualified...

rob234ert — Tue, 04 Feb 2020 22:35:29 GMT

my insurance is accrued. can you deduct that

Re: Can I deduct mortgage insurance premiums on a reverse mortgage?

ColeenD3 — Tue, 04 Feb 2020 23:30:46 GMT

Reverse mortgages.

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. Any interest (including original issue discount) accrued on a reverse mortgage is considered interest on home equity debt and isn’t deductible.

Reverse Mortgage (click for reference)

Re: It depends. You can deduct amounts you paid for qualified...

Stanjorgens — Thu, 27 Feb 2020 21:14:05 GMT

I received a 1098 form which lists mortgage insurance premiums. Is that amount deductible

Re: It depends. You can deduct amounts you paid for qualified...

CatinaT1 — Thu, 27 Feb 2020 21:17:57 GMT

Yes, mortgage interest, mortgage insurance premiums, and real estate taxes.

Re: It depends. You can deduct amounts you paid for qualified...

dcb1995 — Wed, 11 Mar 2020 04:16:17 GMT

My 1098 shows an acquisition date, but doesn't show an outstanding mortgage principal or origination date, so Turbo Tax won't accept this as a valid 1098 entry. Is the form wrong or is Turbo Tax wrong or what?

Re: It depends. You can deduct amounts you paid for qualified...

DianeC958 — Fri, 13 Mar 2020 16:53:16 GMT

Your 1098 form should have this other information. The program needs this information to determine if the amount of mortgage interest you paid is fully deductible on your tax return. The mortgage interest deduction is limited if your mortgage originated after December 2017 to the first $750,000 and if your mortgage originated before then the amount of interest deductible is limited to the first $1,000,000.

If you have your mortgage statement for the end of the year it should show the principal amount for the mortgage. The origination date would be the same typically as the date you purchased the home.

Re: It depends. You can deduct amounts you paid for qualified...

dcb1995 — Sat, 14 Mar 2020 06:33:13 GMT

This 1098 is for a reverse mortgage, so there is no interest to deduct. I'm just trying to get the mortgage insurance amount entered because it is deductible. So it would seem that the other two fields are irrelevant, yet TurboTax insists on them not being omitted. I don't know of any other way to enter the mortgage insurance premium or to make some other indication that this is a reverse mortgage. So it seems this is a TurboTax bug, n'est pas?

Re: It depends. You can deduct amounts you paid for qualified...

KrisD15 — Sat, 14 Mar 2020 21:34:22 GMT

The reverse mortgage insurance would not be delectable because it is not paid to build, purchase or improve your home.

Please remember that a reverse mortgage is not a loan on your home, in fact quite the opposite; therefore the insurance charge is not a deduction for you. This is not the same as Private Mortgage Insurance which is linked to you making home loan payments. It is insuring that you receive the payments.

Re: It depends. You can deduct amounts you paid for qualified...

Blerma — Thu, 16 Jul 2020 01:51:30 GMT

All of these are deductible for a reverse mortgage? Any qualifying conditions?

Re: It depends. You can deduct amounts you paid for qualified...

DawnC — Thu, 16 Jul 2020 02:02:18 GMT

Because reverse mortgages are considered loan advances and not income, the amount you receive isn't taxable. Any interest (including original issue discount) accrued on a reverse mortgage is considered interest on home equity debt and isn’t deductible.

@Blerma

Re: It depends. You can deduct amounts you paid for qualified...

RobertWS — Tue, 02 Feb 2021 05:20:04 GMT

I am preparing my 2020 return. I entered Home mortgage interest and insurance expenses from Form 1098. I answered the question regarding qualified use of the proceeds NO as none of it was used to acquire, add on, etc. The program is not allowing an interest deduction on Schedule A, but is allowing the insurance expense deduction. I believe to allow the insurance expense is in error. The 2019 software did not allow either on Schedule, which is correct. How can I get the insurance expense removed from Schedule A? Does your software need an update to stop it, or what?

Re: It depends. You can deduct amounts you paid for qualified...

DianeW777 — Wed, 03 Feb 2021 13:05:27 GMT

We are aware of this experience. Please sign up for email notifications when an update related to this issue is available here.

Reverse mortgage for purchase

winner1023 — Sun, 03 Apr 2022 21:12:42 GMT

Is the initial amount I paid for MIP at closing, deducyable?

Re: Reverse mortgage for purchase

Mike9241 — Mon, 04 Apr 2022 05:04:25 GMT

did the charge go into your escrow account? if so it's not deductible. you get the deduction when the money is taken out of escrow to pay the premium.

Re: It depends. You can deduct amounts you paid for qualified...

RozV086 — Fri, 10 Feb 2023 23:10:39 GMT

I am so confused! I know I can't deduct interest on my reverse mortgage, but am confused about line 5 Mortgage insurance premiums. Some say I can deduct that, but depends. Depends on two different things (I can't remember what they are)....so what are they and what do they mean?

Re: It depends. You can deduct amounts you paid for qualified...

RozV086 — Fri, 10 Feb 2023 23:19:41 GMT

how do I know if my reverse mortgage insurance premiums are acquisition indebtedness and not home equity indebtedness.

Re: It depends. You can deduct amounts you paid for qualified...

MayaD — Fri, 10 Feb 2023 23:26:03 GMT

The itemized deduction for mortgage insurance premiums has expired. You can no longer claim the deduction for 2022. Irs.gov

Re: It depends. You can deduct amounts you paid for qualified...

RozV086 — Fri, 10 Feb 2023 23:38:08 GMT

Thank you. I don't understand why they even send me a 1098! Just to confuse me!!! LOL