Posted on: 03rd Jul, 2009 06:36 am
My son is going throught the process of deed in lieu on a condo he originally lived in and then rented as he moved. He is deeply in debt but is not filing for bankruptcy. He has been unable to rent and the property has been on the market for 90 days. So will he have to pay taxes on the "forgiven debt" if the deed in lieu goes through? This is not something he is even thinking about.
Hi ladybug,
It will depend upon the state laws whether or not your son will have to pay the taxes on the forgiven debt. You should consult an attorney and he will let you know about your state laws regarding "forgiven debt".
It will depend upon the state laws whether or not your son will have to pay the taxes on the forgiven debt. You should consult an attorney and he will let you know about your state laws regarding "forgiven debt".