How to GetForeclosureTax Relief ContentsIf you borrow money from somebody and do Introduction ..…………………………...1not repay some or all of it, then the InternalRevenue Service says that you received an America Tax Laws………..……….…...2income, and as we know, they tax all incomes Form 1099-C…………………..………….2too. This has undesirable side-effects for Assets and Liabilities………………....2those whose homes are foreclosed becausethey also have to pay tax on the experience Payment agreement…….………......3too. This is not always necessary, though.Here is how you might be able to avoid it.
2American Tax LawsAmerican tax law says that when a debt forgiven inforeclosure exceeds the fair market value (FMV) of themortgaged house, then the difference is income, andtherefore taxable. That is because the borrower “received” agreater benefit than they would have if they had sold thehouse themselves. Form 1099-C Your lender is obliged to provide you with a Form 1099-C on which the debt forgiven and the FMV both appear. If your home has already been auctioned, the FMV will be the sale price. If not, your lender may have indicated a higher estimate. This is one good reason not to let things like this drag on – if you are lucky, the estimated higher FMV could be to your tax advantage. In either case, determine whether the foreclosure resulted in a "taxable income” or not.What’s does that mean? Assets and LiabilitiesFor more terms and definitions,check out ForeclosureDeals.com’s You may offset any negative net worth against a “profit” on aglossary page:http://www.foreclosuredeals.com/G foreclosure. This is easy to calculate too. Simply estimate thelossary.php value of your total assets (car, television, clothes etc) and compare this with the total of your outstanding debt. If the result is a negative value, this can come off your “taxable foreclosure income” too, potentially helping you to manage your foreclosure tax obligations even more.
3 Payment AgreementForeclosure Deals12550 Biscayne Blvd, Suite 306 If your calculations fall to your advantage, contact theMiami, FL 33181FAX: 1-347-402-6620 Internal Revenue Service right away. If you still oweContact@foreclosuredeals.com “foreclosure income tax”, that could be a good opportunityIf it’s not a deal, we won’t list it here! to negotiate a further reduction in your overall tax liability.Find us on the Web:http://www.ForeclosureDeals.com/