Tax Facts

8187 / Is the interest accrued on the reverse mortgage deductible by the borrower?

Updated: December 31, 2024 at 02:26 AM
According to IRC Section 451, and Treasury Regulation Section 1.451-2, the answer is no.

Interest on a reverse mortgage added monthly to the outstanding loan balance as it accrues is neither includible in a cash method lender’s gross income, nor deductible by a cash method borrower at the time it is added.
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