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seattle-relo.
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November 7, 2007 at 12:47 PM #10839November 7, 2007 at 1:01 PM #96790
patientlywaiting
ParticipantIt’s quite possible depending on the situation.
If you bought an investment house in 2000 for $200,000 and the value tripled to $600,000. During the peak your refied that house and invested in several other properties. The market crashes and some of your properties go into foreclosure. If you let your 2000 house foreclose, you may owe capital gains taxes, even if your cash was lost in bad investments.
November 7, 2007 at 1:01 PM #96870ParticipantIt’s quite possible depending on the situation.
If you bought an investment house in 2000 for $200,000 and the value tripled to $600,000. During the peak your refied that house and invested in several other properties. The market crashes and some of your properties go into foreclosure. If you let your 2000 house foreclose, you may owe capital gains taxes, even if your cash was lost in bad investments.
November 7, 2007 at 1:01 PM #96852ParticipantIt’s quite possible depending on the situation.
If you bought an investment house in 2000 for $200,000 and the value tripled to $600,000. During the peak your refied that house and invested in several other properties. The market crashes and some of your properties go into foreclosure. If you let your 2000 house foreclose, you may owe capital gains taxes, even if your cash was lost in bad investments.
November 7, 2007 at 1:01 PM #96860ParticipantIt’s quite possible depending on the situation.
If you bought an investment house in 2000 for $200,000 and the value tripled to $600,000. During the peak your refied that house and invested in several other properties. The market crashes and some of your properties go into foreclosure. If you let your 2000 house foreclose, you may owe capital gains taxes, even if your cash was lost in bad investments.
November 7, 2007 at 1:24 PM #96885seattle-relo
ParticipantWhat if it is your primary residence. Say you bought it in 2006 for 650K and owe 620K, market value is now 600 and you didn’t refinace. Would that be a loss? (I don’t believe you get credit for a loss)
November 7, 2007 at 1:24 PM #96893ParticipantWhat if it is your primary residence. Say you bought it in 2006 for 650K and owe 620K, market value is now 600 and you didn’t refinace. Would that be a loss? (I don’t believe you get credit for a loss)
November 7, 2007 at 1:24 PM #96878ParticipantWhat if it is your primary residence. Say you bought it in 2006 for 650K and owe 620K, market value is now 600 and you didn’t refinace. Would that be a loss? (I don’t believe you get credit for a loss)
November 7, 2007 at 1:24 PM #96814ParticipantWhat if it is your primary residence. Say you bought it in 2006 for 650K and owe 620K, market value is now 600 and you didn’t refinace. Would that be a loss? (I don’t believe you get credit for a loss)
November 7, 2007 at 1:31 PM #96827SD Realtor
Participantseattle-relo sorry to cop out on you but I would consult a CPA. I think I know the answer but it is to speculative and I do not want to give bad guidance.
SD Realtor
November 7, 2007 at 1:31 PM #96894Participantseattle-relo sorry to cop out on you but I would consult a CPA. I think I know the answer but it is to speculative and I do not want to give bad guidance.
SD Realtor
November 7, 2007 at 1:31 PM #96899Participantseattle-relo sorry to cop out on you but I would consult a CPA. I think I know the answer but it is to speculative and I do not want to give bad guidance.
SD Realtor
November 7, 2007 at 1:31 PM #96908Participantseattle-relo sorry to cop out on you but I would consult a CPA. I think I know the answer but it is to speculative and I do not want to give bad guidance.
SD Realtor
November 7, 2007 at 1:36 PM #96833kev374
ParticipantI know for a fact that if you didn’t refinance the original loan then it is non-recourse. There cannot be a deficiency judgement against you and nor can there be any tax liabilities. Of course as always double-check with a CPA as sdr said.
If you refinanced however, there are huge problems including possible deficiency judgements and/or IRS tax liability. I asked another question about this whether it only applies to cash-out or not.
I would imagine definciency judgements are much better because you know how the IRS is about money owed to them 🙂 From what I’ve read many lenders will discharge the loss and issue 1099 resulting in huge tax liability for the borrower.
I think there was a bill in congress to change this legislation but not sure what is the state of that.
November 7, 2007 at 1:36 PM #96898ParticipantI know for a fact that if you didn’t refinance the original loan then it is non-recourse. There cannot be a deficiency judgement against you and nor can there be any tax liabilities. Of course as always double-check with a CPA as sdr said.
If you refinanced however, there are huge problems including possible deficiency judgements and/or IRS tax liability. I asked another question about this whether it only applies to cash-out or not.
I would imagine definciency judgements are much better because you know how the IRS is about money owed to them 🙂 From what I’ve read many lenders will discharge the loss and issue 1099 resulting in huge tax liability for the borrower.
I think there was a bill in congress to change this legislation but not sure what is the state of that.
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