money from the sale of my mom's house

Yes, you must report the sale on your return if you are the beneficiary. The reverse mortgage is not a deduction for you in any way on the tax return.

This is considered a sale of inherited property and reported as an investment sale. You will use a stepped up cost basis of the fair market value (FMV) on the date of death, plus any capital improvements and selling expenses.  If the home was sold fairly soon after death then the selling price will provide an accepted FMV.  This means that your gain or loss may be minimal but it must still be reported.  See the steps below.

Considerations before giving the money to your son.  If the amount of money is greater than $15,000 a gift tax return will need to be completed. 

The annual exclusion is $15,000 for 2018, 2019, 2020 and 2021. You could choose to give $15,000 per year or if your son has a spouse, you can give that amount to each of them for a total of $30,000).  

Due to the lifetime gift tax exemption amount of $11.7 million in 2021, there will be no tax due, however a return must be filed if the gift was greater than the annual exclusion of $15,000.  

I advise seeking the advice of legal counsel specializing in gift tax law.

• Gift Tax FAQs

The sale of inherited property can be entered using the following instructions.  

1. Open or continue your return (you can choose the Search box and type 'sale of second home' then use the Jump to link to enter your inherited sale) or follow the menu.
2. Under Wages & Income scroll to Stocks, Cryptocurrency, Mutual Funds, Bonds, Other (1099-B)
3. Answer Yes on the Did you sell any stocks, mutual funds, bonds, or other investments in 2021? screen
   • If you land on the Your investment sales summary screen, select Add More Sales
4. On the OK, let's start with one investment type screen, select Other, then Continue
5. On the Tell us more about this sale screen, enter the name of the person or institution that brokered the sale
6. On the next screen, select  Other (choose this also for inherited homes) then select  I inherited it under How did you receive this investment?