From TaxAlmanac, A Free Online Resource for Tax Professionals
From TaxAlmanac
Discussion Forum Index --> Tax Questions --> Mortgages, Reverse
Skq9545 (talk|edits) said:
| 14 February 2007
|
| Client has a reverse mortgage. I was reading some Federal Trade Commission facts on reverse mortgages. Basically there are three types of reverse mortgages. I am trying to think this through as I write. FTC facts for consumers says interest on reverse mortgages is not deductible on income tax returns until the loan is paid off in part or whole. What about the income the individual receives is that taxable as income? From the bank statement, I am assuming this client has a line of credit type of reverse. I cannot determine for sure if she takes out a regular amount or just accesses the line of credit when she needs it.
|
Skq9545 (talk|edits) said:
| 14 February 2007
|
| Oops, just read a little farther and answered my own question. The proceeds of a reverse mortgage are generally tax-free.
|
Michaelstar (talk|edits) said:
| 14 February 2007
|
| You have correctly answered both of your questions. The interest is not deductible until paid which will be upon the payoff of the reverse mortgage in most cases. The draws from the line are also not taxable as they are draws from the loan.
|
To join in on this discussion, you must first
log in.
