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Whaat are the income tax ramifications on a deed in lieu of forclosure?

Posted on: 20th Oct, 2008 08:28 am
We have had our house in short sale since July of 2007. We have moved out of the area and have purchased another house. If the taxes were waved would this qualify as a primary residence even tho we do not live there now?
Hi ltt!

Welcome to forums!

In case of a deed-in-lieu foreclosure, if the deficient amount is forgiven, then you will be charged taxes on it whereas if you were not forgiven and you paid the deficient amount, then no taxes will be levied on it. If you do not live in the house, then I don't think it will qualify as a primary residence.

Feel free to ask if you have further queries.

Sussane
Posted on: 20th Oct, 2008 08:34 pm
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