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dgiles815 · Joined: 25 Jan 2010 Posts: 1 1.27 Dollars($)

when a home is foreclosed on, is the owner responsible for any taxes? received a 1099-a form with the amount of 190,732.00 balance outstanding, market value 199,325.00. if responsible what in the amount of taxes could be owed.

adonis · Posted: Mon Jan 25, 2010 8:44 pm Post subject:

Hi dgiles,

When a home is foreclosed by the lender, the borrower is responsible for paying off the deficient balance resulting from the sale. If the borrower pays it off, then he won't be responsible for paying taxes. However, if the deficient balance is forgiven by the lender, it will be considered as your income. In that case, you'll have to pay taxes on that forgiven debt. However, you should check out your state laws. In most states, due to Mortgage Debt Relief Act, borrowers don't have to pay taxes on the forgiven amount.

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