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gamblinp3 · Joined: 10 Feb 2010 Posts: 1 1.33 Dollars($)

Does the Mortgage Forgiveness Debt Relief Act of 2007 assist in forgiving the taxes incurred from a Deed in Lieu. We have just received a tax form (10-99) for the amount the bank did not recover from the sale of property in 2008. We are not able to pay a tax on $199,00.00 as we are civil servants and wont make that type of money. We are seeking a tax attorney now but are not sure of the right coarse of action. Does anyone know of a coarse of action. We have already been uprooted by a move to Wyoming due to a job transfer and now we feel lost.

savior70 · Posted: Thu Feb 11, 2010 3:24 am Post subject:

Hi gamblinp,

The Mortgage Forgiveness Debt Relief Act of 2007 applies to all debts discharged in the years 2007 through 2012. If your property was sold through a deed in lieu and the lender forgave the deficiency, it will be considered as your taxable income. But if you used the property as your primary residence, you can claim exemption from paying tax on this canceled debt amount.

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