Posted on: 11th Mar, 2010 02:54 pm
after filing a chapter 7 bankruptcy, that included two investment properties, one will be foreclosed and the other will be a deed in lieu of foreclosure, will there be a tax liability when we file our tax returns?
lls
lls
Hi Curiousjane,
The deficient amount will be forgiven in case of deed in lieu of foreclosure. Thus, the IRS will consider this as your income and you would be liable for paying taxes on that amount. However, depending upon Mortgage Debt Relief Act, you may not have to pay the taxes. I would suggest you to contact a tax expert and take his opinion in this regard as well.
Thanks
The deficient amount will be forgiven in case of deed in lieu of foreclosure. Thus, the IRS will consider this as your income and you would be liable for paying taxes on that amount. However, depending upon Mortgage Debt Relief Act, you may not have to pay the taxes. I would suggest you to contact a tax expert and take his opinion in this regard as well.
Thanks