Posted on: 22nd Jun, 2009 01:21 pm
how dose a forecloser affect your taxes
cmctrike
Welcoem to the forum
As always uncle SAM want to get share of everything
Any forgiven debt in your name is considered to be a income in your name. If you short sale or foreclose the lender will send you a 1099C and you need to report it as an income when you file taxes
Now about the good part as of it stands, End of 2007 a law was passed which elimintes the taxes on the forgiven debt on your primary residence. This ends in 2011
Good luck and feel free to ask
Welcoem to the forum
As always uncle SAM want to get share of everything
Any forgiven debt in your name is considered to be a income in your name. If you short sale or foreclose the lender will send you a 1099C and you need to report it as an income when you file taxes
Now about the good part as of it stands, End of 2007 a law was passed which elimintes the taxes on the forgiven debt on your primary residence. This ends in 2011
Good luck and feel free to ask
Hi cmctrike,
The IRS considers the forgiven debt as the borrower's income. If there is any deficiency from the sale of the house and your lender forgives the amount, you will have to pay taxes. But as Realgeni has mentioned, there is a Mortgage Forgiveness Debt Relief Act which can help you claim tax exemptions on the forgiven debt.
The IRS considers the forgiven debt as the borrower's income. If there is any deficiency from the sale of the house and your lender forgives the amount, you will have to pay taxes. But as Realgeni has mentioned, there is a Mortgage Forgiveness Debt Relief Act which can help you claim tax exemptions on the forgiven debt.