Posted: Fri Jan 09, 2009 8:18 pm Post subject: Primary property definition
Hello, If you are living in a house and if you are renting a portion of the house, say 1/4th of sq ftage, can it still be considered your primary residence when forclosed (Ref to Mortgage forgiveness Act).
Thanks.
Thank you for the info. Here is my situation.
I owned a home 60 miles form my work. And also, I rented a small apartment near to my work. I live from tue-thu at my apartment and fri-mon at my house working remotely mon and friday. I rented a portion of my home due to my limited usage. But, I pay all the bills on my house. Can it be in the definition of Primary house with the above situations?
Thank you
kingno, this is not an uncommon situation. people commonly obtain a rent that is close to work while maintaining their home elsewhere. that you rented a portion of your home doesn't disqualify you from claiming the house you own as your primary residence.
underwriters are very picky these days, so i wouldn't be surprised at hearing an argument about my above statement, but a reasonable person isn't going to penalize you for being thrifty. _________________ George M. Akerley
Loan Consultant
860-221-5044
Thank you George. That answer comforts me. I went through a short sale last month and I want to make sure that when I file my taxes with the 1099 I am receiving from them, that I am covered under Mortgage forgiveness act, for the difference of amount. My home address is my official residence address where I get and file all my bills. Just want to make sure that renting a portion of it doesnt invalidate me claiming the house and eligibility for mortgage forgivness act.
Was the deficient amount resulting from the sale of the property forgiven? If it's forgiven, then only you will get a 1099 form from the lender. I don't think renting a portion of the house invalidates you for the mortgage forgiveness act.
Hi Niicss,
There is about 210K difference from the amt that I owed vs what the property sold for and lender has forgiven the deficiency from the short sale.
And told that I will be receiving 1099 for that amount. I am tensed up if this invalidates my primary property clause and if I have to pay tax for 210K.
As the deficient amount has been forgiven, the lender will definitely send you a 1099 form. The IRS will consider the deficient amount as an income on your part and will charge taxes on it.
Hi Jerry, I do understand that I will get a 1099 for the difference amount. Thats the reason for my question here about primary property definition so I can take shelter under mortgage forgiveness act.
A property is considered to be your primary or principle when a person inhabits it for most of the time. A primary property can be a house, apartment, trailer or boat. In case of your primary property, you will be able to avoid capital gains on the sale provided you buy another place of equal or greater value which will become your new residence. _________________ Procrastination is the enemy of your financial sucess
Normally, when a debt is forgiven or canceled by a lender, it is included as income on your tax return and thus it is considered as a taxable income. With the Mortgage Forgiveness Debt Relief Act, the borrowers can exclude certain canceled debt on their principal residence from income. Any debt that is reduced through mortgage restructuring or is forgiven in connection with a foreclosure, qualifies for the relief. I do not think it renting a portion of property will invalidate the primary property clause.
Thanks. _________________ Good is the Enemy of Great.
Lori Guest
Posted: Thu Apr 30, 2009 5:50 pm Post subject: Federal 2009energy tax credit for furnace/ac
The credits available for qualifying purchases refer to being installed in a a qualifying dwelling unit "as a dwelling unit that is located in the United States and is used as a residence by the taxpayer." I live in my owner occupied duplex and am putting in qualified equipment for the credit in the unit that I rent. Do you know if I can claim this as a tax credit since it is going in the rented unit?
kingno1
