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lew4219
New Member

Can I deduct mortgage insurance premiums on a reverse mortgage?

 
15 Replies
KatrinaB
Intuit Alumni

Can I deduct mortgage insurance premiums on a reverse mortgage?

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. 

rob234ert
Returning Member

Can I deduct mortgage insurance premiums on a reverse mortgage?

my insurance is accrued. can you deduct that

ColeenD3
Expert Alumni

Can I deduct mortgage insurance premiums on a reverse mortgage?

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)

Stanjorgens
New Member

Can I deduct mortgage insurance premiums on a reverse mortgage?

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

CatinaT1
Expert Alumni

Can I deduct mortgage insurance premiums on a reverse mortgage?

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

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dcb1995
Returning Member

Can I deduct mortgage insurance premiums on a reverse mortgage?

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?

DianeC958
Expert Alumni

Can I deduct mortgage insurance premiums on a reverse mortgage?

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.

 

 

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dcb1995
Returning Member

Can I deduct mortgage insurance premiums on a reverse mortgage?

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?

KrisD15
Expert Alumni

Can I deduct mortgage insurance premiums on a reverse mortgage?

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. 

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Blerma
Level 1

Can I deduct mortgage insurance premiums on a reverse mortgage?

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

DawnC
Expert Alumni

Can I deduct mortgage insurance premiums on a reverse mortgage?

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.

 

@Blerma

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RobertWS
New Member

Can I deduct mortgage insurance premiums on a reverse mortgage?

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?

DianeW777
Expert Alumni

Can I deduct mortgage insurance premiums on a reverse mortgage?

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

winner1023
New Member

Can I deduct mortgage insurance premiums on a reverse mortgage?

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

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