Each week in our Ask the Tax Editor series, Joy Taylor, The Kiplinger Tax Letter editor, answers questions on topics submitted by readers. This week, she's looking at five tax questions from readers. ( Get a free issue of The Kiplinger Tax Letter or subscribe .)

Question: I am planning to take out a reverse mortgage on my primary home. Will I owe federal income tax on the money I receive in the transaction?

Joy Taylor: No. The payments you get from a reverse mortgage are treated as nontaxable loan proceeds. Note that you cannot deduct the interest that you eventually pay on Schedule A of Form 1040 . That's because you are not using the reverse mortgage proceeds to buy, build or substantially improve the home that is securing the mortgage.

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