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My CPA told me I will owe 6K in taxes because the amount of the foreclosure sale and the among I ORIGINALLY purchased the house for is 17 K more. Thus, I must declare the 17K as income, albeit the liability is WAY more [purchased 97K->sold for 117K (bank)->owed 184K)

is he right? This sounds wrong to me. Help me please!

jameshogg · Posted: Tue Feb 15, 2011 7:51 pm Post subject:

Hi Marc,

If the lender has forgiven the deficient balance resulting from the sale of the property, then the forgiven amount will be considered as your income and you'll be liable for paying taxes on it. However, depending upon the Mortgage Debt Relief Act, you may not have to pay taxes for the forgiven debt.

Thanks

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