Posted on: 14th Oct, 2009 12:16 pm
My husband took a job in another part of the state (California) and we can't sell our house because of the economy; we owe almost twice what it's worth. We have an equity line of credit; if we forclose what happens with the line of credit and will we have to pay taxes on the difference of what we owe and what the Bank sells the house for?
Don't quote me on this one - USA Tax law isn't my forte, but as far as I understand it you shouldn't have to pay taxes on the net loss from the sale of your home.
if you owe say 300K and the house only sells for 150K you will still have a legal obligation to pay off the other 150K, but I don't think there would be any additional taxes payable on it.
if you owe say 300K and the house only sells for 150K you will still have a legal obligation to pay off the other 150K, but I don't think there would be any additional taxes payable on it.
The bank may come after you for the equity loan
You do nto need to pay taxes on the deficient amount. The lender may send you a 1099C at the end of the year, all your need to do is show it in your tax filing and will nto be taxd due to the provisign in the current law
You do nto need to pay taxes on the deficient amount. The lender may send you a 1099C at the end of the year, all your need to do is show it in your tax filing and will nto be taxd due to the provisign in the current law