Posted on: 06th Sep, 2010 12:36 pm
I don't know whether to do a short sale, deed in lieu, or foreclosure. I have been on Social Security disability since 2005. Are there any tax ramifications in any of these 3 situations? I live in Oregon.
Hi ranchagain,
In case of short sale and foreclosure, you will be liable for paying the balance mortgage amount resulting from the property sale. As you'll be paying the balance dues, you won't be liable for any tax payments. However, in case of a deed in lieu of foreclosure, the balance amount is forgiven. The forgiven dues can be considered as income by the IRS but you won't have to pay taxes due to the Mortgage Debt Relief Act.
Thanks
In case of short sale and foreclosure, you will be liable for paying the balance mortgage amount resulting from the property sale. As you'll be paying the balance dues, you won't be liable for any tax payments. However, in case of a deed in lieu of foreclosure, the balance amount is forgiven. The forgiven dues can be considered as income by the IRS but you won't have to pay taxes due to the Mortgage Debt Relief Act.
Thanks