When it comes to the mortgage debt forgiveness act passed at the tail end of 2007, there are some things that can’t really be helped. If you are facing foreclosure, the mortgage debt forgiveness tax relief isn’t much of a help, especially if you use a short sale to get out of the foreclosure.
What will help? Inman News reports that insolvency may be the way to go in this case:
According to Chet Burgess, an enrolled
agent who owns Brookwood Tax Service in Atlanta, "the law provides if
the taxpayer is insolvent to the extent of the amount of debt, a short
sale would not be taxable income."Insolvency could help someone facing foreclosure, Burgess said,
whereas the new Mortgage Forgiveness Debt Relief Act would not.
You can figure out whether or not the IRS considers your case one of insolvency by visiting the IRS Web site and downloading (for free) form 433F.
Technorati Tags: facing foreclosure, foreclosure blog, form 433F, IRS Web site, mortgage debt, mortgage debt forgiveness, mortgage loan blog, tax reliefAdd to:
You think how long we will be able to overcome all these? I think it is really getting worst.
Posted by: help with loan modification | March 26th, 2009 11:10 pm |
Insolvency is a great way for a homeowner of an investment property that does a short sale to avoid paying the irs huge taxes. The mortgage debt forgiveness relief act does not cover non primary residences so insolvency can be a life saver to some folks.
Posted by: How to short sale | April 30th, 2009 12:35 pm |
Nice post. The profit gain from real estate is enormous but on other side those who really wants to buy a house gets hurt
Posted by: Free and Clear System | October 22nd, 2009 1:53 pm |
As a growing number of banks go bankrupt more and more people realize that the situation is not going to change soon.
Posted by: Mortgage loan modification help | November 15th, 2009 3:46 am |
Insolvency might be one solution, but I think you should always consider some other less cruel alternatives.
Posted by: Good karosszéria javítás | December 3rd, 2009 10:59 am |
We hope the rest of the year will be better ..;)
Posted by: Online marketing | May 5th, 2010 2:22 am |
If my home forecloses (I had to refince to keep the house sop I could pay off my soon to be x husband for a divorce. Now I cant afford the home and it is foreclosing. Also had to get equity loan because the well wnet dry and I could not afford all the bills. Can I file insolvency on the 1st and the equity loans?? If they tax me I might as well just quit work because the IRS will take all my pay check. I am single
Posted by: Karen | August 23rd, 2010 3:32 pm |