Posted on: 27th Sep, 2010 08:28 am
Are there different tax implications to Deed in Lieu of and foreclosure and short sale.
I have a second property that was discharged during bankruptcy several years ago. Now the mortgage owner is wanting to act.
If I attempt short sale, my understanding is I can still be exposed for capital gains. Is this true for deed in Lieu or foreclosure? I am mostly trying to reduce my taxable exposure. Any thoughts?
I have a second property that was discharged during bankruptcy several years ago. Now the mortgage owner is wanting to act.
If I attempt short sale, my understanding is I can still be exposed for capital gains. Is this true for deed in Lieu or foreclosure? I am mostly trying to reduce my taxable exposure. Any thoughts?
hi guest!
welcome to forums!
after a short sale or foreclosure, the lender will come after you for the balance amount resulting from the sale. you'll be liable to pay off the balance amount to the lender. as far as deed in lieu of foreclosure is concerned, the lender will forgive the balance amount resulting from property sale. however, you won't be liable for any taxes for the forgiven balance due to the mortgage debt relief act.
feel free to ask if you've further queries.
sussane
welcome to forums!
after a short sale or foreclosure, the lender will come after you for the balance amount resulting from the sale. you'll be liable to pay off the balance amount to the lender. as far as deed in lieu of foreclosure is concerned, the lender will forgive the balance amount resulting from property sale. however, you won't be liable for any taxes for the forgiven balance due to the mortgage debt relief act.
feel free to ask if you've further queries.
sussane