Posted on: 22nd Oct, 2008 03:51 am
what about deed of lieu?..what happens in this case..would you have to pay taxes on the rest of what you owe when they take over the house
Hi Dbrierff,
Welcome to our forums.
If you're going for a deed-in-lieu, chances are that you may have to pay taxes on any deficiency resulting from the difference of what you owe and the sale price of the home. By the way, you don't need paying any deficiency in case of deed in lieu. Just check out for more details on whether to pay tax after deed-in-lieu.
Good luck
Welcome to our forums.
If you're going for a deed-in-lieu, chances are that you may have to pay taxes on any deficiency resulting from the difference of what you owe and the sale price of the home. By the way, you don't need paying any deficiency in case of deed in lieu. Just check out for more details on whether to pay tax after deed-in-lieu.
Good luck
well i thought the law was you dont have to pay taxes anymore..the new law they have out??
Hi linda!
Welcome to forums!
In case of deed in lieu, a person may have to pay deed tax if he doesn't qualify for the tax relief under the Mortgage Debt Forgiveness Tax Relief Act. This act is applicable till the end of 2009. According to this Act, one need not pay tax on canceled debt resulting from deed in lieu.
However, the Tax Relief Act has not yet come into effect in California. So, borrowers in California will have to pay deed tax on canceled debt as it will be considered as income.
You should note an important thing in this regard. Even if the lender may not collect deficiency, you can pay cash towards the unpaid debt so that you can avoid a negative impact on his credit report.
Feel free to ask if you have further queries.
Sussane
Welcome to forums!
In case of deed in lieu, a person may have to pay deed tax if he doesn't qualify for the tax relief under the Mortgage Debt Forgiveness Tax Relief Act. This act is applicable till the end of 2009. According to this Act, one need not pay tax on canceled debt resulting from deed in lieu.
However, the Tax Relief Act has not yet come into effect in California. So, borrowers in California will have to pay deed tax on canceled debt as it will be considered as income.
You should note an important thing in this regard. Even if the lender may not collect deficiency, you can pay cash towards the unpaid debt so that you can avoid a negative impact on his credit report.
Feel free to ask if you have further queries.
Sussane