I own a house in Idaho that we bought in April of 2005 as our primary residence. We lived there from this date until February of 2008 when we had to move to California for family and job issues. We are under water in the house but tried to keep our credit by renting the house out and eating the loss every month (a big one!).
Now we are loosing our renter and I have taken a major pay cut so we just cannot afford the loss every month. We are looking into the short sale, deed in lieu or possible foreclosure.
My question is, will I qualify for this Act even though we rented the house for the last year?
You can take advantage of the Mortgage Debt Forgiveness Tax Relief Act if your principle residence goes into short sale or deed in lieu foreclosure. Your primary residence is qualified depending upon the amount of time that you lived in it over the past five years. In my opinion, you may not be able to get the benefits of the Mortgage Debt Forgiveness Tax Relief Act as it has become a rental property now.
actually we are registering it as a 'vacation rental property'. do you think this will effect it? Seems ridiculous that I tried to make it work and will be in more trouble for this.
Is it possible to appeal to the IRS in some way?
Thanks.
Guest
Posted: Wed Apr 08, 2009 2:36 am Post subject:
Hi,
First is this property is now rental property so you can't get qualify to get the
profit of Mortgage Debt Forgiveness Tax Relief Act.
Yes, as far as I know, rental properties do not qualify for Mortgage Forgiveness Debt Relief Act. The lender may ask you to pay the deficient amount resulting from a deed in lieu.
kachman
