PMI Reverse Mortgage - Is it Deductible in 2019 or to be amortized? - Spidell

PMI Reverse Mortgage – Is it Deductible in 2019 or to be amortized?

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Message Board PMI Reverse Mortgage – Is it Deductible in 2019 or to be amortized?

  • This topic has 0 replies, 1 voice, and was last updated 1 week, 6 days ago by Lawrence Danny.
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      Lawrence Danny
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      My client’s took out a Reverse Mortgage on 10-25-19 and financed $14,500 through a loan addition through escrow for Mortgage Insurance Premiums with a HUD reference.  They did not pay any mortgage payments in 2019.

      I’m thinking to allocate (amortize the PMI Premiums over 7 years).  The 2019 Schedule A instructions indicate these fees can be deducted fully in 2019 if the mortgage insurance contract was issued in 2019.  Contact the mortgage insurance issuer to determine the deductible amount if it isn’t included in box 5 of Form 1098.  My clients didn’t receive a 2019 Form 1098 and when they contacted the mortgage insurance issuer, they said to the best of their knowledge, it’s not deductible.

      I looked through some IRS Publications but couldn’t find any specifics for Reverse Mortgages when it comes to deducting PMI.  I found this on a tax feed but it doesn’t cite any authority:

      PMI deductible for a reverse mortgage. Yes, for reverse mortgages, you can deduct amounts you paid for qualified mortgage insurance. The insurance must be in connection with home acquisition debt- the deduction is not available for the portion relating to other types of indebtedness, such as home equity indebtedness …Jun 4, 2019mprove a qualified home isn’t home acquisition debt.

      The loan replaces only Home Acquisition Debt.

      Does anyone have experience with deducting PMI in regards to a Reverse Mortgage?  Any thoughts?  Any Tax Authority?

      This may all be for naught since there are income limitations per the PMI Worksheet in the Schedule A Instructions.

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