This is query regarding Capital Gains on Sale of Reverse Mortgaged Property to settle the loan. The Reverse Mortgage connected with Insurance Company for annuity. And not simple Reverse Mortgage.
Will the interest be considered as an Expense when the property is sold to settle the loan for calculation of Capital Gains ? As after paying the hefty interest to the lender the borrower ultimately doesn't get much in hand.
Capital Gains Tax on Reverse Mortgaged Property: Interest May Not Be Deductible as Expense. Details Needed. A query was raised regarding the calculation of capital gains tax on the sale of a reverse mortgaged property, specifically when the reverse mortgage is tied to an insurance company for annuity purposes. The individual inquired whether the interest paid on the loan could be considered an expense to reduce capital gains, as the borrower receives little after settling the loan. The response indicated that detailed facts about the property's acquisition, the reverse mortgage, and allowable costs are necessary, and suggested that interest might not be deductible as an expense against capital gains. (AI Summary)
TaxTMI 
TaxTMI 
