Tax Tip Podcast or Blog Post and the Tax Implications of a Reverse Home Mortgage

Tax Tip Podcasts & Blog Posts for Realtors, Brokers, Real Estate Professionals
Tax Implications of a Reverse Home Mortgage

A reverse home mortgage is a loan where the lender pays you (in a lump sum, a monthly advance, a line of credit, or a combination of all three) while you continue to live in your home. With a reverse mortgage, you retain title to your home. Depending on the plan, your reverse mortgage becomes due with interest when you move, sell your home, reach the end of a pre-selected loan period, or die.

Because reverse mortgages are considered loan advances and not income, the amount you receive is not taxable. Any interest (including original interest discount) accrued on a reverse mortgage is considered home equity debt, which is not deductible for years 2018 through 2025.

Brenda Fitch Real Estate Professional
Brenda Fitch Real Estate Professional

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Tax Implications of a Reverse Home Mortgage
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(Updated 04272021 320-520)

Published by Don Fitch, CPA

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