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?
As you have a non-recourse loan, the lender will not be able to come after you for the deficient balance resulting from the sale of the property. However, the forgiven debt will be considered as your income by the IRS. But depending upon the Mortgage Debt Forgiveness Act, you won't be liable for paying the taxes.
Niicss is "Correct"
The "CA" Mortgage Debt Forgiveness most likely will be extended for 2009 or longer but as of this posting it is NOT. Governor Schwarzenegger has vetoed bill SBX 32 because it has other things in it beside mortgage debt relief.
He actually requested that the legislators send him a bill with ONLY Mortgage Debt Forgiveness in it so he could sign it. There are (2) such bills right now but neither has moved up to the point of getting to his desk but that is only a matter of time. I suspect in the coming months that one of those bills will pass and "COD" for qualified principle residential Short Sales will be forgiven.
For those of you with COD for 2009, you have (2) options for dealing with it on your taxes.
1. Use the "Insolvency" rule at the Federal level (if you believe you qualify) and be mindful of your retirement account assets at the time your debt was forgiven. H&R Block should be able to help you in this regard if you can't do it yourself
2. File your Federal Taxes and then file for an Extension in California and hope the Debt Forgiveness bill passes by October of 2010.
The "CA" Mortgage Debt Forgiveness most likely will be extended for 2009 or longer but as of this posting it is NOT. Governor Schwarzenegger has vetoed bill SBX 32 because it has other things in it beside mortgage debt relief.
He actually requested that the legislators send him a bill with ONLY Mortgage Debt Forgiveness in it so he could sign it. There are (2) such bills right now but neither has moved up to the point of getting to his desk but that is only a matter of time. I suspect in the coming months that one of those bills will pass and "COD" for qualified principle residential Short Sales will be forgiven.
For those of you with COD for 2009, you have (2) options for dealing with it on your taxes.
1. Use the "Insolvency" rule at the Federal level (if you believe you qualify) and be mindful of your retirement account assets at the time your debt was forgiven. H&R Block should be able to help you in this regard if you can't do it yourself
2. File your Federal Taxes and then file for an Extension in California and hope the Debt Forgiveness bill passes by October of 2010.
[System detected duplicate content, converted into image. Thanks.]
Should be on the Governor's desk this morning.
california chronicle*com/articles/view/150617
california chronicle*com/articles/view/150617
All is good now...the bill has been passed at last!!!
Go to the CA Franchise Tax Board website and it says it right there.
I was trying to post the link here but it wouldn't let me.
Go to the CA Franchise Tax Board website and it says it right there.
I was trying to post the link here but it wouldn't let me.
Yup, did my taxes yesterday and my tax guys software was already updated. I'm actually getting a little bit from the state...even better than I thought.
if i did a refi to get air condition on my residence and i am in a short sale i heard i do not qualify for the debt relief act.
Hi don,
I've given my suggestions in regards to your query at:
http://www.mortgagefit.com/inprocess/about40109.html#170082
Take a look at it. Hope it helps you.
Thanks,
Jerry
I've given my suggestions in regards to your query at:
http://www.mortgagefit.com/inprocess/about40109.html#170082
Take a look at it. Hope it helps you.
Thanks,
Jerry
Post Your Comment