Posted on: 20th Aug, 2008 12:06 pm
I have a rental property which I bought in 1986 for $70K. It was my primary residence until 4 years ago. I have refinanced several times over the years and currently owe $200K. It looks like I may lose it to foreclosure if I don't find renters soon. What will my tax liability be if it ends up selling for around 150K, like similar foreclosures in the neighborhood? Will I owe a capital gains tax on the amount over $70K and an additional tax on the deficiency balance? :?:
Hi Nora.
Welcome to the forum. If the property is sold in $150k the lender can come after you for the deficiency Judgment.
If the sale price is more than the Adjusted Basis then you will have to pay tax on it. BTW Adjusted Basis = (initial purchase price + maintenance & improvement cost) – depreciation. However you should contact with a tax adviser to calculate the amount that you need to pay as tax.
Best of luck,
Larry
Welcome to the forum. If the property is sold in $150k the lender can come after you for the deficiency Judgment.
If the sale price is more than the Adjusted Basis then you will have to pay tax on it. BTW Adjusted Basis = (initial purchase price + maintenance & improvement cost) – depreciation. However you should contact with a tax adviser to calculate the amount that you need to pay as tax.
Best of luck,
Larry