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Tax impact of Deed In Lieu of Foreclosure

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piercent Joined: 24 Feb 2010 Posts: 1 1.28 Dollars($)	Posted: Wed Feb 24, 2010 12:58 pm    Post subject: Tax impact of Deed In Lieu of Foreclosure Like 0 Dislike 0 I have two spec properties which the contractors never finished with a CO. I never got to the place of taking a permanent mortgage but still owe the Construction Loans. Am I going to have a big tax liability if the mortgage companies accept a Deed In Lieu for about 30-40% of the loan?
adonis Joined: 22 Oct 2005 Posts: 10254 Location: ALASKA 1044.21 Dollars($)	Posted: Wed Feb 24, 2010 8:30 pm    Post subject: Like 0 Dislike 0 Hi piercent, If you apply for a deed in lieu of foreclosure, then the lender would forgive the balance resulting from the sale. The IRS can charge you taxes. But due to the Mortgage Debt Relief Act, you will not be liable for paying the taxes to the IRS. _________________ Procrastination is the enemy of your financial success

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