Foreclosure in 92313>Question Details

Sal, Home Buyer in Grand Terrace, CA

How do I avoid paying taxes (1099) on a foreclosure?

Asked by Sal, Grand Terrace, CA Wed Jul 9, 2008

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Hello Sal. Whether you need to pay taxes on the amount reported on the 1099 depends on your overall financial circumstances. You really need to consult with a tax professional who can review your situation and advise you of applicable exemptions under state and federal tax laws. Depending on your facts, it's possible that you don't have pay taxes on the 1099 amount at all or you may have to pay taxes on the full amount or only a portion of it. If you have to pay taxes, you may be able to arrange for a payment plan (up to 5 years I believe), but the downside of a payment plan is that you'll have to pay interest and penalties. Unfortunately, we can't answer your question better on Trulia as real estate agents are not licensed to give tax advise and even if we were qualified and licensed, we could not give advice without a careful review of your particular facts which would certainly go beyond what we can do in this online forum. Good luck to you.
0 votes Thank Flag Link Wed Jul 9, 2008
Ute Ferdig -…, Real Estate Pro in New Castle, DE
MVP'08
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Hi Sal

Let us know how things went since 2008.

We did come up with the mortgage forgiveness and debt relief act.

Did that work for you ?

Perry
Web Reference: http://www.ruthandperry.com
0 votes Thank Flag Link Sun Apr 27, 2014
News headline from February: Mortgage Forgiveness Debt Relief Signed Into Law - Some relief for those sellers considering working with their mortgage company on a "short sale": http://www.realtoractioncenter.com/mortgagecancellationsummary.doc Good luck!
0 votes Thank Flag Link Thu Jul 10, 2008
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