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troubled Guest	Posted: Mon Mar 15, 2010 10:42 am    Post subject: home Like 0 Dislike 0 We bought our home for $200k in 1992. Over these years we have refi'd and taken money out of it and turned it into a rental home for the last 3 years. Now, we do not have any renter and unable to pay the mortgage. I called the lender asking for loan modification and they said it is not qualified since it is a rental property. The market value of the property is now lower than what we owe. We are in Washington State, if we foreclose the house, are we still required to pay capital gains tax?
smithsussane Joined: 18 Sep 2008 Posts: 10439 Location: Alaska 985.83 Dollars($)	Posted: Mon Mar 15, 2010 10:18 pm    Post subject: Like 0 Dislike 0 Hi Guest! Welcome to forums! If you let the lender foreclose the property, then you would be liable for paying the deficient balance resulting from the sale. This is because there are high chances that the property would have lost it's value and would be sold at a lower price compared to your loan. Thus, if there is no profit from the sale of the property, you won't be liable to pay the capital gains taxes. Feel free to ask if you've further queries. Sussane

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