Is Reverse Mortgage Interest Deductible?
If you are in a position to take a loan, I would surmise that the best loan has the most benefits. Of course you want to strive for the best interest rate, lowest fees and best general terms but everyone wants perks. Perks like a a gift card, or cash or even a trip are all nice, but the biggest perk of all is the ability to deduct interest paid. I came across an insightful question in the San Francisco Chronicle asking whether or not Reverse Mortgage interest is deductible or not:
Q: Harold P. asks, “I have a reverse home mortgage. I understand that I cannot deduct interest on my home mortgage on my income tax return until I actually pay the interest. (Interest on a reverse mortgage is added to the loan balance each year but is not paid until the loan is repaid, usually at maturity or when the home is sold.)
“I will be paying approximately $20,000 per year interest on paper until I sell my home. If I sell my home in five or 10 years, I will have paid $100,000 to $200,000 in interest. I can’t believe the government will allow me to deduct that amount when I sell my home. Isn’t there some way I can deduct that interest while the interest is accumulating before I sell my home?” Read the Answer
Written by charles dennis on May 23rd, 2007 with
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