Foreclosure in Louisville>Question Details

Eskcskk7, Other/Just Looking in Louisville, KY

im in foreclosure now and doing a short sale can i claim the interest i paid on my mortgage in 2009

Asked by Eskcskk7, Louisville, KY Sat Jan 9, 2010

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Scott Godzyk’s answer
The foreclsoure or short sale will have no affect on 2009 tax retruns, you may be able to deduct the interest that you actaully paid if you itemize. Your accountant or a good tax program will be able to assist you when you are filing. The repercussions of the short sale or foreclosure, will be on what ever year it happens.
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1 vote Thank Flag Link Sun Jan 10, 2010
Your best bet is to consult with an accountant or CPA. A tax attorney should also be able to help you out with this.
0 votes Thank Flag Link Sun Jan 10, 2010
Keith, it's a 1098. A 1099 is for many type of income including interest income . For interest paid you get a 1098.
0 votes Thank Flag Link Sat Jan 9, 2010
If you get a 1099 int from the bank you should be able to claim the interest you paid. Check with the bank to find what they indicated you filed. You will get a statement from the bank soon. Usually the banks have to send the information out by end of Janurary.

Keith Manson
First Weber Group
Certified Distressed Property Expert
Metro Milwaukee
0 votes Thank Flag Link Sat Jan 9, 2010
Yes, I understand that it is, but do double check with your tax advisor. You should be able to claim the interest you paid in '09. However, you have not said whether or not this is your principal residence. I am assuming it is. The issue brought up by Al, regarding "forgiven debt" from the short sale possibly being taxable, also depends on whether or not this property is your principal residence. Again, as an agent, I am not a tax advisor and cannot give tax advice ..
0 votes Thank Flag Link Sat Jan 9, 2010

You will get a tax form from you bank showing what you are allowed to deduct. That form will show exactly what they will be turning into the IRS as interest that you have paid. Simply take that form to your accountant or tax preparation expert along with all your other documentation.

Hope this helps,
0 votes Thank Flag Link Sat Jan 9, 2010
Real estate agents can provide opinions on how to file your taxes best contact a CPA you can file your taxes correctly.
0 votes Thank Flag Link Sat Jan 9, 2010
Esk, please double check with your tax pro:

You can claim it, but only the amount that you actually paid. You should be getting a 1098 shortly from your bank as in previous years, and the interest can be claimed for 2009. If you haven't made too many payments then the interest paid will be low, but whatever it is can be claimed on your return.

Even if you haven't made a single mortgage payment all year you may still have some interest paid if you had an escrow account with your lender.

For 2010 you may have issues because whatever amount you are short with your mortgage will be "forgiven debt" for which you will recieve a 1099C in 2011 and in some instances could be taxable.
0 votes Thank Flag Link Sat Jan 9, 2010
Yes if you made payments and they included interest you do the same you do any year foreclosure or short sale do nothing to affect how you file your taxes. If you need help getting back into a home after your short sale we have a program that gets you back on track and into a home. Good Luck Bob
0 votes Thank Flag Link Sat Jan 9, 2010
For an accurate answer contact your tax consultant as he/she knows your finances best--if you paid the interest, yes, you should be able to claim it.

0 votes Thank Flag Link Sat Jan 9, 2010
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