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The interest is not deductible - unless you paid off the loan in full.
Any interest (including original issue discount) accrued on a reverse mortgage is not deductible until you actually pay it, which is usually when you pay off the loan in full. Your deduction may be limited because a reverse mortgage loan generally is subject to the limit on Home Equity Debt.
However, for reverse mortgages, you can deduct amounts you paid for qualified mortgage insurance. The insurance must be in connection with home acquisition debt- the deduction is not available for the portion relating to other types of indebtedness, such as home equity indebtedness. Also, the insurance contract must have issued after 2006.
For more information, please refer to IRS publication 936, page 8.
A reverse mortgage is not a Home Equity Loan-
can i deduct interest deferred on a reverse mortgage
No, you can't deduct deferred interest.
As RayW7 explained above, the only time your can deduct interest on a reverse mortgage is when you pay off the loan in full. Even then it may be limited.
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