Two Changes in Tax Code May Benefit Some Homeowners

RE:Two Changes in Tax Code May Benefit Some Homeowners

Martha S — Tue, 26 Aug 2008 11:00:00 GMT

The lender is going to issue a form 1099 in any case as part of their claim of a business loss. Homeowner does not need to declare this as cancellation of debt income but should have all documentation in hand in case the IRS questions the return. Such challenges are likely given that the IRS cannot necessarily tell from the lender's 1099 whether the property was a primary residence or whether consumer debt was bundled into the loan. If the house was refinanced to pay off other consumer debt, a portion of the cancelled debt may still be taxable. I recommend seeing a tax professional. The law applies to foreclosures, short sales, and refinances under the Hope for Homeowners provisions of the Foreclosure Prevention Act of 2008.

RE:Two Changes in Tax Code May Benefit Some Homeowners

Tax Forclosures — Thu, 19 Jun 2008 11:00:00 GMT

I've heard that about 1% of properties in preforeclosure typically go into foreclosure. Does anybody have data showing what the actual percentages were for the LA area in say 1988, 1991, 1995 and 2000?

RE:Two Changes in Tax Code May Benefit Some Homeowners

Gavin — Fri, 15 Feb 2008 13:00:00 GMT

The H.R. 3648 Bill a.k.a. the Mortgage Forgiveness Debt Relief Act of 2007 will eliminate a taxable gain on borrowers who received a forgiveness of debt from a lender in a short sale. Normally, if a lender forgives the debt, to this extent the homeowner would have a taxable gain. HR 3648 will eliminate this â€œphantom incomeâ€ on a borrowerâ€™s principal residence. HR 3648 applies to all debt forgiven from Jan 1, 2007 and on and the same concept can apply to residential investment property when the lender is willing to accommodate that. Sorting out who is eligible is daunting. Read: http://www.whitehouse.gov/news/releases/2007/12/20071220-6.html If in or nearing delinquency could seek real estate investor to mitigate potential damage. Experienced investors have been doing short sales for decades.

RE:Two Changes in Tax Code May Benefit Some Homeowners

thatwasit — Tue, 12 Feb 2008 13:00:00 GMT

http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=110_cong_public_laws&docid=f:publ142.110

RE:Two Changes in Tax Code May Benefit Some Homeowners

neil — Tue, 12 Feb 2008 13:00:00 GMT

Have been unable to obtain any clarification on this Mortgage Forgiveness Debt Relief Act of 2007. Is there some it applies for and some it does not? Have customer that lost primary residence in foreclosure due to non-payment in 2007. Forced out of home which was later sold by bank for $22,000 less than owed. Bank issued 1099A and when contacted by phone about relief act, says they won't amend the 1099A and customer must still pay taxes on $22,000 in forgiven debt. Gave no reason why debt should not be forgiven by the act. As the 1099A isn't corrected by bank, should customer just not report it on his taxes and wait and see what the IRS would do?

RE:Two Changes in Tax Code May Benefit Some Homeowners

anonymous — Mon, 11 Feb 2008 13:00:00 GMT

Does the mortgage debt relief act of 2007 apply for homes that are being foreclosed on, or only for short sales and deed in lie of forclosure?

RE:Two Changes in Tax Code May Benefit Some Homeowners

Michelle — Mon, 11 Feb 2008 13:00:00 GMT

Is there a relief package or alternate package for investment properties. Anything on the horizon?