We have a $330 K Reverse Mortgage on our Primary Home. Each year the interest charge adds to the Mortgage Balance by about $12 K per year. Over the last year I paid down the interest by a prepayment of $3 K, which also reduces the total mortgage balance. I received a 1098 showing the repayment and proceeded to apply it as Home Mortgage interest deduction. The Issue is with the worksheets as everything is backwards. The original Loan amount is going up (versus down as in a traditional mortgage), so when I enter the original Loan amount or Acquisition debt (C on Smart Worksheet) and then the Outstanding Mortgage (which is now higher), my $3,000 in interest payment is reduced to $2,700. Seems I should "reverse" the amounts versus a traditional mortgage.
a reverse mortgage is considered Home Equity Debt making interest payments nondeductible. Mortgage insurance payments would be deductible for 2020 under P.L. 116-94 IRC 163(h)(3)(E) subject to phaseout. 10% for each $1,000 or fraction thereof that AGI exceeds $100,000 ($50,000 if MFS)