Posted on: 04th Jul, 2008 03:51 am
How much tax will I have to pay if I owe $465, 000 and short sale proceeds will be around $320, 000? Will I have to pay the same amount of tax if I go for foreclosure? The loan is a purchase mortgage with the first worth $400,000 and 2nd $65,000. does the mortgage debt relief act apply to me? I haven't been out of work for 10 months and hence couldn't pay. I do have cc debts but I cannot pay all of them, only one having a low rate of interest. I have about $7000 in the bank and not much as assets just a car paid off and a life insurance policy. How do I deal with this situation?
Any idea if this special session will happen before tax time?
Called the governer's office today and they said it was not a dead bill and everyone should contact their senator to show their support so I contacted Joe Simitian at 650 688-6384
OK, so SB97 is now dead and the new bill is called SBX825. Senator Calderon's assistant said it will be presented in a special session but it has not been scheduled yet. In a week she may have more details.
Heard this from someone's tax lady. She is an attorney and was an attorney for the IRS. Her suggestion for anyone in this situation is to file your Federal return and file an extension for the state return. She feels that the state will be forced to comply with the debt relief act. If in the end the state does not comply just file your state return without the 1099-C income and let them try to come after you which they probably will not.
No luck yet with Turbo Tax, I'm waiting for this to play out. All I can say is if the state of CA tries to stick me with a HUGE tax bill on my Short Sale, I'll file personal BK.
CA not passing that bill is complete BS! The only reason they didn't is because the State is BROKE and they want to steal money from anywhere they can. At this point, I don't need or care about my credit score so if necessary, I'll tank it w/ a BK before I pay this broken state another dime.
CA not passing that bill is complete BS! The only reason they didn't is because the State is BROKE and they want to steal money from anywhere they can. At this point, I don't need or care about my credit score so if necessary, I'll tank it w/ a BK before I pay this broken state another dime.
this is from the FTB:
California gives you an automatic filing extension through October 15, 2010. You don't need to apply for one. Here's what you should do if you can't file by April 15, 2010:
You are due a refund - File your return by October 15, 2010. Choose e-file and direct deposit for the fastest refund.
You have a balance due - Pay the amount you owe by April 15, 2010 to avoid penalties and interest. You can pay online, by credit card, or by check with form FTB 3519. Then file your return by October 15, 2010. Choose e-file to ensure that we receive your return on time.
You're not sure if you have a balance due - Use the worksheet on form FTB 3519 to figure your tax.
So you'd take a chance if it passes by Oct 15 to file. I know if it passes and I file, I'd actually get a refund. Do I take that chance? I think so, if not I'd owe the State over $12,000.
California gives you an automatic filing extension through October 15, 2010. You don't need to apply for one. Here's what you should do if you can't file by April 15, 2010:
You are due a refund - File your return by October 15, 2010. Choose e-file and direct deposit for the fastest refund.
You have a balance due - Pay the amount you owe by April 15, 2010 to avoid penalties and interest. You can pay online, by credit card, or by check with form FTB 3519. Then file your return by October 15, 2010. Choose e-file to ensure that we receive your return on time.
You're not sure if you have a balance due - Use the worksheet on form FTB 3519 to figure your tax.
So you'd take a chance if it passes by Oct 15 to file. I know if it passes and I file, I'd actually get a refund. Do I take that chance? I think so, if not I'd owe the State over $12,000.
How are you suppose to pay the State money you don't have??? Is this where I claim insolvency?
There are supposed to be more Foreclosures and Short Sales in 2010 than 2009. What is this going to do to the CA economy? Why would anyone even consider paying such a large tax bill if their credit is already in the tank?
There are supposed to be more Foreclosures and Short Sales in 2010 than 2009. What is this going to do to the CA economy? Why would anyone even consider paying such a large tax bill if their credit is already in the tank?
I left California in 2008 but did a short-sale on my home there in 2009. Because I was a non-resident in 2009, I'm thinking about not even filing a CA extension because I won't have any CA income to report if the bill passes. Anyone else in my boat?
I called Senator Calderon's Office this morning and they confirmed both SB 97 and AB 111 are dead. A new billed that does the same thing was introduced on Feb. 4th 2010 (SBX8 25) and is in the process.
The senator's office acknowledged the urgency of getting it passed before April 15th and said to contact the Governor's office to voice support for it. Right now you can track the progress of the bill at:
sen ca gov
legislation link and search or sbx8 25 or by Author (Calderon)
The senator's office acknowledged the urgency of getting it passed before April 15th and said to contact the Governor's office to voice support for it. Right now you can track the progress of the bill at:
sen ca gov
legislation link and search or sbx8 25 or by Author (Calderon)
ftb.ca.gov/professionals/taxnews/2009/July/Article_9.shtml
Well, I just finished Turbo Tax and basically it says I need to consult a Tax Professional because the IRS has strict guidelines on insolvency. I'm sure I qualify for it but now I have to pay a 3rd party to do it for me and jump through hoops because the State of CA is Greedy, Corrupt and Broke!
Check out AB 1779
Sounds good but its not even a "X" Bill, both SB97 and AB 111 died because they sat around too long. There are a ton of people facing this tax issue by April 15th. How is another slow poke bill just introduced going to pass that quickly?
I have a question...if anyone knows. I am doing a short sale on my condo this year. I have read all of the information on this site which has been extremely helpful. My concern now is if I will qualify for insolvency or not. I have a large retirement account but can not access it without great penalties. Any advice?
I have read somewhere that your retirement accounts do count as part of your personal assets. Your personal assets are "everything" you own period. I'm not positive but you'll need to verify that yourself.
I have come to the conclusion that "insolvency" is the only way to avoid the CA State "COD" tax at this point. Funny thing is, every time I call a CPA or Tax Attorney, none of them will touch this or know much about it. One Tax Attorney I spoke with today was rather rude stating that he has wasted too much time talking to people about this very issue. He simply said that he could not help me and that he had to go!
The best advice seems to be to file your Federal Return and then File for an extension on your CA return in hopes that the State will pull its head out of the sand and exempt "COD" the same as the Federal Government has done in these extraordinary times.
This is another reason why I am thinking about leaving CA and never returning ...
I have come to the conclusion that "insolvency" is the only way to avoid the CA State "COD" tax at this point. Funny thing is, every time I call a CPA or Tax Attorney, none of them will touch this or know much about it. One Tax Attorney I spoke with today was rather rude stating that he has wasted too much time talking to people about this very issue. He simply said that he could not help me and that he had to go!
The best advice seems to be to file your Federal Return and then File for an extension on your CA return in hopes that the State will pull its head out of the sand and exempt "COD" the same as the Federal Government has done in these extraordinary times.
This is another reason why I am thinking about leaving CA and never returning ...