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I have a reverse mortgage from Reverse Mortgage solutions. I…

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I have a reverse mortgage...
I have a reverse mortgage from Reverse Mortgage solutions. I received a statement that shows Interest accrued for the year and added to the balance $3,525.41 and a MIP paid to HUD and added to balance $6,816.09 I also received a 1098 form showing 2310.28. What can I take off my 2015 tax return. thanks
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Submitted: 2 years ago.Category: Tax
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3/28/2016
Tax Professional: emc011075, Tax adviser replied 2 years ago
emc011075
emc011075, Tax adviser
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Satisfied Customers: 3,791
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You can only deduct mortgage interest and property taxes. Home owner insurance is not deductible as well as anything that is accrued and anything paid into escrow.

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Customer reply replied 2 years ago
what about the discrepancy on the reported 1098 and the amount on the summary statement of 3525.41
Tax Professional: emc011075, Tax adviser replied 2 years ago

You always go what's on your tax statement. Reports are for informational purposes only. $3525 is the loan balance, not the interest. If the interest is accrued, it is also not deductible.

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Tax Professional: emc011075, Tax adviser replied 2 years ago

Because reverse mortgages are not traditional mortgages, what you can deduct is very limited. Because most of the interest is accrued (not paid), it is not currently deductible. You can only deduct what you actually paid, not what you will in the future.

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Tax Professional: emc011075, Tax adviser replied 2 years ago

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