Posted on: 17th Dec, 2008 04:30 pm
do you think doing the deed in lieu of foreclosure is going to effect our federal or state refund i have heard from a tax advisor, that when you do foreclosure, that it makes your income look like substanial more income and can cause you to have to pay in possibly have you heard of anyone having to lose there refund check because of any negative equity? or any other persons doing the deed in lieu messing up there income tax refund any how many years that last? i have heard so many different things and with us being broke already, living pay check to pay check our refund is what we are looking forward to , so that we may pay some bills off. thanks for answering the other questions. we have not gotten any thing back yet saying it is over and done, how long does it take?
Hi beverlywoodfords,
A deed in lieu foreclosure comes into picture when you are unable to pay your debts for 1 or more months. You will have to apply to the lender mentioning the hardship that you are facing and check if he is ready to give you a deed in lieu foreclosure.
If the lender accepts a deed in lieu foreclosure, you will have to give the property to the lender who will give you a mortgage release certificate. The lender will then sell the property in the market to recover his debt.
If there is a deficient amount from the sale of the property, the lender forgives it. This forgiven amount is considered as the income of the borrower and it is a taxable amount. You will have to pay taxes to the IRS on this forgiven amount.
Thanks
A deed in lieu foreclosure comes into picture when you are unable to pay your debts for 1 or more months. You will have to apply to the lender mentioning the hardship that you are facing and check if he is ready to give you a deed in lieu foreclosure.
If the lender accepts a deed in lieu foreclosure, you will have to give the property to the lender who will give you a mortgage release certificate. The lender will then sell the property in the market to recover his debt.
If there is a deficient amount from the sale of the property, the lender forgives it. This forgiven amount is considered as the income of the borrower and it is a taxable amount. You will have to pay taxes to the IRS on this forgiven amount.
Thanks