Posted on: 07th Dec, 2008 06:24 am
hello,
do i qauify for the tax break for mortgage debt forgiveness if i only been in the home for 1 year.. i purchased my home in july 07..but lost the new home to forcloser in sept 08.. it has been charge off (first mortgage).. second mortgage still pending...will i have to pay taxes on the charged off amount..
thanks,
do i qauify for the tax break for mortgage debt forgiveness if i only been in the home for 1 year.. i purchased my home in july 07..but lost the new home to forcloser in sept 08.. it has been charge off (first mortgage).. second mortgage still pending...will i have to pay taxes on the charged off amount..
thanks,
Hi notagain,
As far as I know, in order to qualify for the Tax Break for Mortgage Debt Forgiveness, one has to stay in the property for 2 years of the last five years. As you have not stayed for 2 years, you will not qualify for it.
As far as charging off first mortgage is concerned, it does not mean that your loan is forgiven. It only means that the first lender has sold off your mortgage to a collection agency who will in turn collect the dues from you. As you will be paying the dues, I don't think you will have to pay taxes on the charged off amount.
Thanks
As far as I know, in order to qualify for the Tax Break for Mortgage Debt Forgiveness, one has to stay in the property for 2 years of the last five years. As you have not stayed for 2 years, you will not qualify for it.
As far as charging off first mortgage is concerned, it does not mean that your loan is forgiven. It only means that the first lender has sold off your mortgage to a collection agency who will in turn collect the dues from you. As you will be paying the dues, I don't think you will have to pay taxes on the charged off amount.
Thanks