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Died in Lieu Taxes

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Sunny Guest	Posted: Tue Feb 16, 2010 9:15 pm    Post subject: Died in Lieu Taxes Like 0 Dislike 0 Own an investment property. Paid 369,000 in 06. Value has bottomed. Lender is willing to accept DIL. Should I get an appraisal first. I am in Arizona. What taxes will I face ? Thanks, Sunny _________________ Need help choosing the right loan? Get free consultation from community lenders/consultant
gmakerley Community Mentor Joined: 09 Nov 2007 Posts: 12376 Location: bloomfield, ct 58.49 Dollars($)	Posted: Tue Feb 16, 2010 10:30 pm    Post subject: Like 0 Dislike 0 if there's a deficiency balance left over, you could be facing the need to pay income taxes on that loss, which your lender could report as income to you. _________________ George M. Akerley Mortgage Underwriter/Consultant Word of Excellence- Writing/Editing/Proofreading 860-221-5044
smithsussane Joined: 18 Sep 2008 Posts: 10439 Location: Alaska 985.83 Dollars($)	Posted: Tue Feb 16, 2010 10:51 pm    Post subject: Like 0 Dislike 0 Hi Sunny! Welcome to forums! If you do not want to save the property, then you should go ahead with the deed in lieu of foreclosure. You may apply for an independent appraisal. It will help you in knowing the right value of your property. The lender will forgive your deficient amount resulting from the sale of the property. The IRS will consider this as your income and charge you taxes on that amount. However, depending upon the Mortgage Debt Relief Act, you may not have to pay the taxes. Feel free to ask if you've further queries. Sussane
Fliu-Trustee Guest	Posted: Wed Feb 17, 2010 2:19 am    Post subject: DIL and 1099 Like 0 Dislike 0 If lender is willing to do DIL then do it. George is incorrect. Sussane is correct; however, if the investment prop. is a 2nd home (but use as rental), you don't pay the taxes when the bank send you 1099c. If you live in a Non Anti-deficiency State, DIL may result in a deficiency collection after 12 months. It depends on YOUR DIL agreement. READ IT. If you have your account prepared a personal financial statement BEFORE your DIL and showing your NETWORTH is Negative or "Insolvement", YOU DON"T HAVE TO PAY 1099c Taxes when the bank send you the 1099c next year. Sincerely, ibuyshortsaleproperties.com
gmakerley Community Mentor Joined: 09 Nov 2007 Posts: 12376 Location: bloomfield, ct 58.49 Dollars($)	Posted: Wed Feb 17, 2010 8:49 am    Post subject: Like 0 Dislike 0 i stand by what i said...investment property is handled differently than owner occupied property. _________________ George M. Akerley Mortgage Underwriter/Consultant Word of Excellence- Writing/Editing/Proofreading 860-221-5044

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