Posted on: 13th Mar, 2011 05:18 pm
borrower purchased the house for $400,000 in 2000. borrower currently owes $580,000 to 1st, $100,000 to 2nd and $400,000 to 3rd for a total of $1,080,000. house will probably sell for 1,100,000 but due to high capital gains tax, borrower wants to either let the house get foreclosed or wants to transfer via deed in lieu of foreclosure. 3rd lender is about to foreclose but is willing to accept deed in lieu of foreclosure from borrower. what are the tax implications to the borrower?
welcome guest,
the first and second mortgage lenders will also have to agree to the option of deed in lieu of foreclosure. unless they agree, the process can't go through. due to the mortgage debt relief act, you won't be able to pay any taxes for the forgiven debt.
the first and second mortgage lenders will also have to agree to the option of deed in lieu of foreclosure. unless they agree, the process can't go through. due to the mortgage debt relief act, you won't be able to pay any taxes for the forgiven debt.