Happy Christmas/Hanukkah/Kwanzaa/Festivus/Solstice/Darwin Day – whatever, we at WalkAwayToday.org don’t judge. 
Just so you know: We’re down to a skeleton staff over the holidays so we can be with our families & loved ones. This doesn’t mean we won’t get back to your calls & emails promptly, but be patient – egg-nog makes us sluggish.
Also: The web-page that past sellers use to track the status of their homes is down. Sorry about that. IT department assures us it should be back up by New Year’s Day.
Again: Happy Holidays. Whether or not you decide to sell your home to us, we wish you the very best this season.
- Paul Hayden
Contact me if you’d like to sell your home:
paul@walkawaytoday.org
(206) 973-3209
December 21, 2011
[youtube=http://www.youtube.com/watch?v=vxyRFSYe7ws&hl=en&fs=1]
April 24, 2009
One of the most common questions we are asked is this: “When you ‘short sale’ my mortgage, will there be any tax consequences?” This is a good question, and we’ll answer it for you here.
In a traditional foreclosure, short sale or any scenerio where the bank takes a loss, what the bank will usually do is issue a 1099 for the ‘loss’ that the bank took. That 1099 is counted as income to you, and is subject to taxation. For example, if you owed 300k on your property, and we acquired the property from you, and settled with the bank for 200k, the bank would have taken a 100k ‘loss’. In the past the bank would send a 1099 and take a loss (banks almost NEVER persue deficiency judgements, but I’ll address that in a seperate post).
Here’s what has changed.
The Mortgage Forgiveness Debt Relief Act was introduced in Congress on September 25, 2007, and became law on December 20, 2007. This act offered relief to homeowners who would formerly owe taxes on forgiven mortgage debt after facing foreclosure. The act extends such relief for three years, applying to debts discharged in calendar year 2007 through 2009. (With the Emergency Economic Stabilization Act of 2008, this tax relief was extended another three years, covering debts discharged through calendar year 2012.)
Normally in US law when a lender decides to forgive all or a portion of a borrower’s debt and accept less, the forgiven amount is considered as income for the borrower and is liable to be taxed.
However, after the signing of the Mortgage Forgiveness Act, amendments have been made to remove such tax liability and allow the borrower and lender to work freely together to find a common solution that is beneficial to both parties. This protection is limited to primary residences
so, you’re off the hook for tax liability if it’s a primary residence. Great news!
But what if you have an investment property or 2nd home you need to get rid of?
Well, you may still be able to get off the hook for any tax consequences, but you have to be able to show that you were insolvent at the time the bank took the loss. Insolvency means that your debts exceed the value of your assets. To figure out whether or not you were insolvent, you will have to total up your assets and your debts, including the debt that was settled or written off. That’s good news for many folks who are in a foreclosure situation, or thinking about walking away from their properties.
March 14, 2009