If it meets IRS requirements, mortgage interest reported in Box 11(B) for a beneficiary receiving a K-1 from an estate or trust is deductible investment interest. This is usually shown as mortgage interest on Schedule A of the beneficiary's Form 1040. If the interest deduction relates to investment property rather than a personal residence, make sure you follow the guidelines.

Check out this guide on reverse mortgage interest tax deductions for additional information on which mortgage-related fees and interest are deductible. It offers a concise summary that complies with IRS regulations regarding trusts and estates.