Comments on: Short Sale and Foreclosure Tax Implications http://shortsalesteps.com/short-sale-and-foreclosure-tax-implications Short Sale, Loan Modification & Foreclosure Specialist Wed, 05 Oct 2011 03:47:57 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Dennis http://shortsalesteps.com/short-sale-and-foreclosure-tax-implications/comment-page-1#comment-105 Dennis Thu, 26 May 2011 14:00:22 +0000 http://shortsalesteps.com/?p=23#comment-105 Thuy, Be careful and assess all areas before you decide to put your property up for short sale. if you can afford to continue to make payments it is usually better for you to do that. eventually the property values will rise. if you did not pay property taxes, then the lien goes on the property. however the mortgage company may still be able to go after a deficiency judgment which will ruin your credit and make you have to pay the difference between what's net from the short sale and the amount you owe, even after they deduct all the expenses. I recommend that you consult either a tax accountant or a real estate attorney before you decide on any action. if you cannot afford to pay the property tax, you maybe able to negotiate a promissory note at 0 percent interest over a 5 or 10 year period with the bank and have the bank pay the taxes. however there are many other considerations that you need legal advice for, before you decide. Thuy, Be careful and assess all areas before you decide to put your property up for short sale. if you can afford to continue to make payments it is usually better for you to do that. eventually the property values will rise. if you did not pay property taxes, then the lien goes on the property. however the mortgage company may still be able to go after a deficiency judgment which will ruin your credit and make you have to pay the difference between what’s net from the short sale and the amount you owe, even after they deduct all the expenses. I recommend that you consult either a tax accountant or a real estate attorney before you decide on any action. if you cannot afford to pay the property tax, you maybe able to negotiate a promissory note at 0 percent interest over a 5 or 10 year period with the bank and have the bank pay the taxes. however there are many other considerations that you need legal advice for, before you decide.

]]> By: Dennis http://shortsalesteps.com/short-sale-and-foreclosure-tax-implications/comment-page-1#comment-104 Dennis Thu, 26 May 2011 13:49:20 +0000 http://shortsalesteps.com/?p=23#comment-104 Ray, your profit or loss is based upon the basis of your property or what you purchased it for, not market value. if you purchased it for 450,000 dollars and sold it for 398,000 then you can have a loss, but be careful how much of a loss you claim. I recommend you talk to a tax accountant. if this was a second home or investment home then you must depreciate the property. if it sold for the same amount less than owed amount owed, then you also have income for that forgiven debt. Ray, your profit or loss is based upon the basis of your property or what you purchased it for, not market value. if you purchased it for 450,000 dollars and sold it for 398,000 then you can have a loss, but be careful how much of a loss you claim. I recommend you talk to a tax accountant. if this was a second home or investment home then you must depreciate the property. if it sold for the same amount less than owed amount owed, then you also have income for that forgiven debt.

]]> By: Dennis http://shortsalesteps.com/short-sale-and-foreclosure-tax-implications/comment-page-1#comment-103 Dennis Thu, 26 May 2011 13:42:10 +0000 http://shortsalesteps.com/?p=23#comment-103 Mercie, I recommend you speak with an attorney. whenever anybody asks for something you should always ask for something in return. in your case they are asking for a promissary note and offered to reduce it. if the terms of the promissary note guarantee that they will pay the property taxes (which are more than $5000), or guarantee that they will not go for a deficiency judgment for the difference in what you owe and what they net after paying legal fees, court fees, late fees, insurance, title fees, real estate broker fees, and other closing costs, (which could be considerably more than 5000) , then it maybe in your interest to take the 5000 dollar promissory note, instead of what maybe a 25,000 dollar or more judgment. Mercie,
I recommend you speak with an attorney. whenever anybody asks for something you should always ask for something in return. in your case they are asking for a promissary note and offered to reduce it. if the terms of the promissary note guarantee that they will pay the property taxes (which are more than $5000), or guarantee that they will not go for a deficiency judgment for the difference in what you owe and what they net after paying legal fees, court fees, late fees, insurance, title fees, real estate broker fees, and other closing costs, (which could be considerably more than 5000) , then it maybe in your interest to take the 5000 dollar promissory note, instead of what maybe a 25,000 dollar or more judgment.

]]> By: Niesha Duenas http://shortsalesteps.com/short-sale-and-foreclosure-tax-implications/comment-page-1#comment-90 Niesha Duenas Sat, 09 Oct 2010 17:56:22 +0000 http://shortsalesteps.com/?p=23#comment-90 Thank you so much for your intriguing post.I'm sorry I cannot add to it as I have no experience with real estate, but can you help me as you seem to be just like a wealth of knowledge. If I market my very own house with no a real estate agent, precisely what is my vulnerability to liability to a buyer? Say I market a residence that has known or unidentified defects. What is the responsibility I’m exposed to, if this is certainly not revealed to the buyer? I’m sure all states are unique, but I’m sure there are some common rules. Especially, I would like to recognize what Nebraska’s are generally, if feasible. Thanks in advance. Thank you so much for your intriguing post.I’m sorry I cannot add to it as I have no experience with real estate, but can you help me as you seem to be just like a wealth of knowledge. If I market my very own house with no a real estate agent, precisely what is my vulnerability to liability to a buyer? Say I market a residence that has known or unidentified defects. What is the responsibility I’m exposed to, if this is certainly not revealed to the buyer? I’m sure all states are unique, but I’m sure there are some common rules. Especially, I would like to recognize what Nebraska’s are generally, if feasible. Thanks in advance.

]]> By: Ray http://shortsalesteps.com/short-sale-and-foreclosure-tax-implications/comment-page-1#comment-51 Ray Thu, 28 Jan 2010 22:45:24 +0000 http://shortsalesteps.com/?p=23#comment-51 I sold my home in 2006 in short sale 1th and 2nd mortgage total was paid off both loans, did not get a dime from the sale. Market Value was 450,000 sold for 398, 000 can I claim the lost from the 450,000 as a write off / lost. about 42,000 I sold my home in 2006 in short sale 1th and 2nd mortgage total was paid off both loans, did not get a dime from the sale. Market Value was 450,000 sold for 398, 000 can I claim the lost from the 450,000 as a write off / lost. about 42,000

]]> By: Bonnie http://shortsalesteps.com/short-sale-and-foreclosure-tax-implications/comment-page-1#comment-20 Bonnie Wed, 18 Nov 2009 19:35:45 +0000 http://shortsalesteps.com/?p=23#comment-20 In the 1st paragraph of your website for Short Sale and Foreclosure Tax Implications, you say that there is a 3 year moratium on taxation of debt forgiveness that does not exceed the owner's basis in the home. I understood that this is a Federal law and applies in all states. Is that correct? Also, in your answer to Mercie, you tell her that she will be liable for taxes on a promissory note if she signs one. This sounds like a contradiction to the statement above. Why is Mercie's case different? In the 1st paragraph of your website for Short Sale and Foreclosure Tax Implications, you say that there is a 3 year moratium on taxation of debt forgiveness that does not exceed the owner’s basis in the home. I understood that this is a Federal law and applies in all states. Is that correct?

Also, in your answer to Mercie, you tell her that she will be liable for taxes on a promissory note if she signs one. This sounds like a contradiction to the statement above. Why is Mercie’s case different?

]]> By: A soul in short sale hell http://shortsalesteps.com/short-sale-and-foreclosure-tax-implications/comment-page-1#comment-18 A soul in short sale hell Wed, 28 Oct 2009 20:56:27 +0000 http://shortsalesteps.com/?p=23#comment-18 I am in the middle of short selling 4 of the 6 residential "investment" properties that I own. I have been told of the tax consequences that I may face regarding selling my properties for less then the mortgage. In all the 4 mortgages on the properties that I am shorting total about $700,000 but the offers I have total about $400,000. Will I be help liable for the $300,000 difference on my taxes? I am in the middle of short selling 4 of the 6 residential “investment” properties that I own. I have been told of the tax consequences that I may face regarding selling my properties for less then the mortgage. In all the 4 mortgages on the properties that I am shorting total about $700,000 but the offers I have total about $400,000. Will I be help liable for the $300,000 difference on my taxes?

]]> By: fritz http://shortsalesteps.com/short-sale-and-foreclosure-tax-implications/comment-page-1#comment-17 fritz Sat, 10 Oct 2009 23:50:44 +0000 http://shortsalesteps.com/?p=23#comment-17 what's gonna happen in a short sale in california in 2009? Is there any extensions on the debt forgiveness for the state tax? We have a 750K loan and a buyer is offering 400K. How much will it cost us? Pls help what’s gonna happen in a short sale in california in 2009? Is there any extensions on the debt forgiveness for the state tax? We have a 750K loan and a buyer is offering 400K. How much will it cost us? Pls help

]]> By: Mark http://shortsalesteps.com/short-sale-and-foreclosure-tax-implications/comment-page-1#comment-15 Mark Wed, 30 Sep 2009 04:00:39 +0000 http://shortsalesteps.com/?p=23#comment-15 Does Florida allow deficiency judgments when the home you live is forclosed on? We are at the point where we just can't pay our mortgage any more, but are concerned about being sued by the mortgage company for a defiency judgement resulting in long term liability and additional problems from the lender after the foreclosure. Does Florida allow deficiency judgments when the home you live is forclosed on?
We are at the point where we just can’t pay our mortgage any more, but are concerned about being sued by the mortgage company for a defiency judgement resulting in long term liability and additional problems from the lender after the foreclosure.

]]> By: jinsu http://shortsalesteps.com/short-sale-and-foreclosure-tax-implications/comment-page-1#comment-14 jinsu Wed, 09 Sep 2009 21:36:27 +0000 http://shortsalesteps.com/?p=23#comment-14 if i do foreclosure or short sale on home,suppose my home is sold for $225000 when my original mortgage is 295.so the diffrence is 70000. do i have to pay tax for that amount? if i do foreclosure or short sale on home,suppose my home is sold for $225000 when my original mortgage is 295.so the diffrence is 70000.
do i have to pay tax for that amount?

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