Posted on: 28th Dec, 2007 06:05 pm
I handed over the house, which had just been appraised by HFC 3 months earlier for 410,000. They put 410,000 on deed as FMV; that was the amount of my outstanding loan so it was a fair trade I thought. Then I got a 1099 saying they had forgiven 180,000 and now I'm liable for that as income? I feel I was coerced into thinking the value was 410,000; I would not have handed it over and would have sold it myself for more.
Hi lifallon,
Welcome to the forum.
You may have tried to sell the house and sell it more but think about that your 180,000 debt has been forgiven. You may only need to pay tax on it.
You may even get tax relief on that forgiven debt as the President Bush has announced about the mortgage tax relief recently. There is a discussion regarding the mortgage tax relief before in the forum. You can check this out- http://www.mortgagefit.com/tax/debtforgiveness-reliefact.html
Hope this will help you.
Feel free to ask if you have any further questions.
Thanks,
Larry
Welcome to the forum.
You may have tried to sell the house and sell it more but think about that your 180,000 debt has been forgiven. You may only need to pay tax on it.
You may even get tax relief on that forgiven debt as the President Bush has announced about the mortgage tax relief recently. There is a discussion regarding the mortgage tax relief before in the forum. You can check this out- http://www.mortgagefit.com/tax/debtforgiveness-reliefact.html
Hope this will help you.
Feel free to ask if you have any further questions.
Thanks,
Larry
You don't have to pay the 180K but you do have to claim it as income on your tax returns. You will have to pay tax on that amount. Companies are now allowed to send you a 1099 to report as income for write offs. I don't agree with this but it's the law.