Advice for selling moms house

[Mauricio Perez]

Hey guys, My mother is selling the old house then renting an apartment. She’s 76 and widowed, living and maintaining a 3.2 home alone on a reverse mortgage. The yearly maintenance expenses plus the loss of equity were in the red and she’s on social security. We close Jan 2nd at the buyer’s request. Any advice on what my mother could do financially with the sale income without buying another property? She’s already paying most back to the bank for the reverse mortgage. Are there any tax breaks for folks her age? Is there anything I should watch out for with the reverse mortgage or taxes? Sorry if this isn’t the right place to ask, but I love bigger pockets and with all the investment and real estate pros on here I wouldn’t really know where else to turn. Thanks, Mauricio

[Anthony Dooley]

@Mauricio Perez Your mother should not pay any taxes on the proceeds. If there is any gain after the reverse mortgage is paid off, it is tax free up to $250,000 of profit. Depending on how much there is left would determine what to do with the money. I would keep some cash for emergencies, insurance deductibles, etc. The rest could be used to pay ahead on her rent so she doesn't have to worry about it. If she wants to invest, I recommend an S&P 500 index fund through any online site such as Ameritrade.