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awoodruff6336
New Member

I did a reverse mortgage loan on my house to pay off my PLC of credit in November 2016. Do I have to show any of this on my 2016 taxes?

 
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MargaretL
Employee Tax Expert

I did a reverse mortgage loan on my house to pay off my PLC of credit in November 2016. Do I have to show any of this on my 2016 taxes?

No, you don't have to show anything on your 2016 tax return.

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

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.  AT that time,your deduction may be limited because a reverse mortgage loan generally is subject to the limit on Home Equity Debt.

For any other questions that pertain to your specific reverse mortgage please refer to link: http://www.irs.gov/publications/p17/ch23.html

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MargaretL
Employee Tax Expert

I did a reverse mortgage loan on my house to pay off my PLC of credit in November 2016. Do I have to show any of this on my 2016 taxes?

No, you don't have to show anything on your 2016 tax return.

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

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.  AT that time,your deduction may be limited because a reverse mortgage loan generally is subject to the limit on Home Equity Debt.

For any other questions that pertain to your specific reverse mortgage please refer to link: http://www.irs.gov/publications/p17/ch23.html

View solution in original post

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