Foreclosure in 53188>Question Details

Smitty, Other/Just Looking in 53188

are a mortgage holder's foreclosure costs tax deductible?

Asked by Smitty, 53188 Wed Jan 6, 2010

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Are forclosure fees tax deductable by home owner
0 votes Thank Flag Link Wed Apr 8, 2015
Scott gave you a good answer but I am not sure for a indivual that placed a mortgage. I would think it would be tracked like any other type of business expense if you had a business. However, mortgage companys do not track and file expenses via there tax filing. There are a number of things that can happen with a mortgage company depending on if there is a investor, pmi company, fha loan ,va loan or some other misc other options. The servicers usually end up filing claims for reimbursement and if there is a loss write off the balance as a loss. Most likley report the losses on their tax filing.

Keith Manson
First Weber Group
Certified Distressed Property Expert
Metro Milwaukee
0 votes Thank Flag Link Wed Jan 6, 2010
To clarify, if you hold a mortgage on say Mr Smith, and you foreclose on them, yes the cost of foreclosure on Mr Smith can be deducted from the income you earned from the property. you really would want to check the site or check with an accountant for yoru exact situation. For a larger bank, with many many mortgages, yes they deduct it as part of the cost of doing business. There are several types of losses including the legal, auctioneer fees, legal notices and then when you buy it back at foreclosure there could be a loss so it is a complicated scenario. good luck
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0 votes Thank Flag Link Wed Jan 6, 2010
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