Posted on: 10th Mar, 2009 10:58 pm
TWO YEARS AGO WE BOUGHT A PIECE OF PROPERTY TO BUILD OUR DREAM HOME. WE GOT A LOAN THROUGH OUR BANK FOR THE LAND AND A LITTLE EXTRA FOR IMPROVEMENTS. WE PUT OUR HOUSE UP FOR SALE AND WERE PLANNING ON USING THE EQUITY TO BUILD THE HOME, HOWEVER OUR HOUSE THAT WE ARE CURRENTLY LIVING IN DID NOT SALE, SO WE ARE NOW STUCK WITH TWO MORTGAGES AND THE BANK SUGGESTED A DEED OF LIEU BEFORE FORECLOSURE. BECASUE OF THE ECONOMY NOW, THE LAND EVEN WITH ALL THE IMPROVEMENTS IS LESS THEN WHAT WE PAID FOR IT TWO YEARS AGO. WOULD WE BE PROTECTED UNDER THE TAX RELIEF ACT?
Hi STACEY,
To qualify for the tax relief, the house has to be your principal residence and you must have stayed there for atleast 2 out of the last 5 years. As you have mentioned you bought the property 2 years ago, I believe you have been staying in the house for those many years. In that case, I think you are protected under the Mortgage Forgiveness Debt Relief Act.
Thanks,
Jerry
To qualify for the tax relief, the house has to be your principal residence and you must have stayed there for atleast 2 out of the last 5 years. As you have mentioned you bought the property 2 years ago, I believe you have been staying in the house for those many years. In that case, I think you are protected under the Mortgage Forgiveness Debt Relief Act.
Thanks,
Jerry