Posted on: 15th Nov, 2010 08:01 pm
my husband and i inherited a house which is not our primary residence its is currently upside down , we stop payment the mortgage, but are wondering what the best route foreclosure or deed in lieu of forclosure, we are considering deed in lieu of foreclosure , what is the tax effect, do i have to pay taxes on the difference ? if so what the rate.
Hi cutieab!
Welcome to forums!
As it is not your primary residence, whether you go for a foreclosure or a deed in lieu of foreclosure, you will be liable for paying the deficient balance resulting from the property sale. However, if the lender forgives the dues, then will have to pay taxes for the deficient balance resulting from the property sale as it will be considered as your income.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
As it is not your primary residence, whether you go for a foreclosure or a deed in lieu of foreclosure, you will be liable for paying the deficient balance resulting from the property sale. However, if the lender forgives the dues, then will have to pay taxes for the deficient balance resulting from the property sale as it will be considered as your income.
Feel free to ask if you've further queries.
Sussane