Posted on: 09th Apr, 2010 07:31 am
After Dec. 2009 will a deed in lieu of forclosure be taxed by the IRS? I am asking this for my sister who could no longer pay her mortgage and had to give up her home.
Hi dwetze,
If case of a deed in lieu of foreclosure, the lender forgives the deficient balance resulting from the sale of the property. This balance amount will become taxable as per IRS. However, depending upon the Mortgage Debt Relief Act, your sister won't have to pay taxes on the forgiven debt.
Take care.
If case of a deed in lieu of foreclosure, the lender forgives the deficient balance resulting from the sale of the property. This balance amount will become taxable as per IRS. However, depending upon the Mortgage Debt Relief Act, your sister won't have to pay taxes on the forgiven debt.
Take care.