Is interest paid for a reverse mortgage tax deductible?

[Bsch4477]

While you remain in the home, the reverse mortgage loan remains outstanding; there is no required interest or principal payment. If you move or sell the home, however, the loan becomes due along with accumulated interest payments. The IRS considers reverse mortgages to be a form of home equity loan. As with a traditional mortgage, interest on a reverse mortgage is deductible; however, this deduction is limited to interest paid on no more than $100,000 of loan principal. This is the IRS limit on home equity debt.

[ColeenD3]

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.

 Because reverse mortgages are considered loan advances and not income, the amount you receive isn't taxable.

For information on deducting mortgage interest and the debt limit that applies, see Publication 936, Home Mortgage Interest Deduction.