HELOC Interest

[5palms]

We took out a Reverse Mortgage HELOC in 2007.  It was structured to not require monthly payments, but instead the interest accrued to the principal balance.  I did not receive a 1098.  The interest and PMI for 2023 was about $34 K.  Is this a deductible expense if I itemize?

[DawnC]

No.  Interest (including original issue discount) accrued on a reverse mortgage isn't deductible until you actually pay it (usually when you pay off the loan in full).   Also, a deduction of interest may be limited because a reverse mortgage generally is subject to the limit on home equity debt, which is not deductible unless the proceeds are used to buy, build, or substantially improve the home that secures the loan.   For information on deducting mortgage interest and the debt limit that applies, see Publication 936, Home Mortgage Interest Deduction.