Posted on: 04th Sep, 2010 03:04 pm
I am facing imminent bankruptcy and my mortgagor has given me just a few days to consider a deed in lieu. What is the better way to go that has the least tax ramifications due to the anticipated deficiency? Why would I want to accept a deed in lieu instead of bankruptcy which will alleviate all debt and deficiency? I don't care about my credit score at this point...it's already in the trash. Thank you.
Hi sjenkins,
You can accept a deed in lieu of foreclosure in order to get rid of the property. This will not only help you in selling off the property but you won't be liable for the balance dues resulting from the property sale. It is true that the forgiven dues are considered as an income by the IRS but you won't be liable for the taxes due to the Mortgage Debt Relief Act.
Thanks,
Jerry
You can accept a deed in lieu of foreclosure in order to get rid of the property. This will not only help you in selling off the property but you won't be liable for the balance dues resulting from the property sale. It is true that the forgiven dues are considered as an income by the IRS but you won't be liable for the taxes due to the Mortgage Debt Relief Act.
Thanks,
Jerry