Posted on: 09th Dec, 2010 11:46 am
Hi,
I divorced over a year ago and own two properties with my ex-husband. Currently my ex has received a loan modification offer and has shared that they will allow me off the loan and to sign a quitclaim deed. It sounds like a great way for me to get out during this tough economy, but we are also in short sale negotiations on the other property. I am concerned about tax ramifications for me. Are there any tax considerations if I am removed from a property through quitclaim deed and I am forgiven of loan responsibility, however, I am not receiving any money or compensation. The property would not have equity now if it was sold.
The divorce decree shares that if properties are sold, then loss and gain should be shared. If we are not selling but removing through quitclaim deeds what do most people do about the loss and gain? Is there any?
I am also uninterested in doing a quitclaim deed on the property in the short sale property and my expectation is to have the bank split the deficiency and 1099 tax forms.
Anything support on what to think about and consider would be great.
Thank you,
E
I divorced over a year ago and own two properties with my ex-husband. Currently my ex has received a loan modification offer and has shared that they will allow me off the loan and to sign a quitclaim deed. It sounds like a great way for me to get out during this tough economy, but we are also in short sale negotiations on the other property. I am concerned about tax ramifications for me. Are there any tax considerations if I am removed from a property through quitclaim deed and I am forgiven of loan responsibility, however, I am not receiving any money or compensation. The property would not have equity now if it was sold.
The divorce decree shares that if properties are sold, then loss and gain should be shared. If we are not selling but removing through quitclaim deeds what do most people do about the loss and gain? Is there any?
I am also uninterested in doing a quitclaim deed on the property in the short sale property and my expectation is to have the bank split the deficiency and 1099 tax forms.
Anything support on what to think about and consider would be great.
Thank you,
E
Hi Emar!
Welcome to forums!
After a property is short sold by the lender, he will be able to come after you for the deficient balance resulting from the sale. If he forgives the dues, then you will be liable for paying taxes. However, as per the Mortgage Debt Relief Act, you may not be liable for paying taxes on the forgiven debt.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
After a property is short sold by the lender, he will be able to come after you for the deficient balance resulting from the sale. If he forgives the dues, then you will be liable for paying taxes. However, as per the Mortgage Debt Relief Act, you may not be liable for paying taxes on the forgiven debt.
Feel free to ask if you've further queries.
Sussane