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Tax liability of short sale/foreclosure

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caresident Joined: 18 Jun 2009 Posts: 2 1.47 Dollars($)	Posted: Wed Apr 14, 2010 4:14 pm    Post subject: Tax liability of short sale/foreclosure Like 0 Dislike 0 I am a CA resident and need help. I am currently in default and have various people contacting me asking to assist in processing a short sale with my lender(Wachovia). After the past 15 months I have given up hope on trying to negotiate with them, and it seems for the good part of 2009 my account was in their loss mitigation department, the only calls I received were in reference to my default balance and asking if I could pay any of it. Only as recent as February 2010 I was finally given a notice of default. Would there be a reason they waited this long to give a notice of default? I know people that have had foreclosures and were out of the house within a few months. I am concerned about tax liability from short sale or foreclosure; I had a chapter 7 bankruptcy discharged in Nov. 2008 that included both my 1st mortgage(main) and 2nd mortgage(eloc) in the bankruptcy. I have checked my credit report and both loans show zero balance with a notation of discharged from bankruptcy, I did not reaffirm with lender during process of bankruptcy. My BK lawyer said that I can just walk away from the home and not pay anything to them but to wait for them to give me the eviction papers stating that until they assumed ownership of the property by removing my name from the county recorder as owner that I could and should stay there because I could still be liable for any damage to or on the property. So my questions; Will I be liable for the taxes from a short sale or foreclosure? Does a chapter 7 bankruptcy have any effect on tax liability for fed/state taxes? Is there a reason why my lender would wait this long(15 months) to give me a notice of default?
adonis Joined: 22 Oct 2005 Posts: 10562 Location: ALASKA 1089.18 Dollars($)	Posted: Wed Apr 14, 2010 9:36 pm    Post subject: Like 0 Dislike 0 Hi caresident, I've given my suggestions in regards to your query at: http://www.mortgagefit.com/problems/shortsale-taxliability.html#160648 Take a look at it. I hope it'll help you. _________________ Procrastination is the enemy of your financial success

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