So we know we screwed up…

[trying2balance]

I read the link JustReader1 posted (below) and it looks like effective Sept 30 Arizona has changed its law to not allow walk-aways. So no matter what the money that we worked hard to save for our future ins going to end up in the hands of the banks. Who already have our tax money to help them weather their mistakes and keep home prices from correcting. I don’t know if I’m more depressed or angry…

http://marcmccain.com/current-events/arizonas-anti-deficiency-laws-are-changing/81/

[patientrenter]

[quote=trying2balance]I read the link JustReader1 posted (below) and it looks like effective Sept 30 Arizona has changed its law to not allow walk-aways….

http://marcmccain.com/current-events/arizonas-anti-deficiency-laws-are-changing/81/%5B/quote%5D

I doubt that any such law will be made to take effect. You refer to losing your $40K to banks. What about the $80K you gained on your other property? Did you get that other property by using money from banks, or did you pay all cash? Do you have any money in a bank? If the bank were made to lose the $40K, would you be OK if some of that $40K were taken from your bank deposits?

Not trying to be mean. I am just trying to point out that even nice people can be… dare I say it, selfish.

[patientrenter]

[quote=trying2balance]I read the link JustReader1 posted (below) and it looks like effective Sept 30 Arizona has changed its law to not allow walk-aways….

http://marcmccain.com/current-events/arizonas-anti-deficiency-laws-are-changing/81/%5B/quote%5D

I doubt that any such law will be made to take effect. You refer to losing your $40K to banks. What about the $80K you gained on your other property? Did you get that other property by using money from banks, or did you pay all cash? Do you have any money in a bank? If the bank were made to lose the $40K, would you be OK if some of that $40K were taken from your bank deposits?

Not trying to be mean. I am just trying to point out that even nice people can be… dare I say it, selfish.

[patientrenter]

[quote=trying2balance]I read the link JustReader1 posted (below) and it looks like effective Sept 30 Arizona has changed its law to not allow walk-aways….

http://marcmccain.com/current-events/arizonas-anti-deficiency-laws-are-changing/81/%5B/quote%5D

I doubt that any such law will be made to take effect. You refer to losing your $40K to banks. What about the $80K you gained on your other property? Did you get that other property by using money from banks, or did you pay all cash? Do you have any money in a bank? If the bank were made to lose the $40K, would you be OK if some of that $40K were taken from your bank deposits?

Not trying to be mean. I am just trying to point out that even nice people can be… dare I say it, selfish.

[patientrenter]

[quote=trying2balance]I read the link JustReader1 posted (below) and it looks like effective Sept 30 Arizona has changed its law to not allow walk-aways….

http://marcmccain.com/current-events/arizonas-anti-deficiency-laws-are-changing/81/%5B/quote%5D

I doubt that any such law will be made to take effect. You refer to losing your $40K to banks. What about the $80K you gained on your other property? Did you get that other property by using money from banks, or did you pay all cash? Do you have any money in a bank? If the bank were made to lose the $40K, would you be OK if some of that $40K were taken from your bank deposits?

Not trying to be mean. I am just trying to point out that even nice people can be… dare I say it, selfish.

[patientrenter]

[quote=trying2balance]I read the link JustReader1 posted (below) and it looks like effective Sept 30 Arizona has changed its law to not allow walk-aways….

http://marcmccain.com/current-events/arizonas-anti-deficiency-laws-are-changing/81/%5B/quote%5D

I doubt that any such law will be made to take effect. You refer to losing your $40K to banks. What about the $80K you gained on your other property? Did you get that other property by using money from banks, or did you pay all cash? Do you have any money in a bank? If the bank were made to lose the $40K, would you be OK if some of that $40K were taken from your bank deposits?

Not trying to be mean. I am just trying to point out that even nice people can be… dare I say it, selfish.

[analyst]

[quote=trying2balance]I read this and it looks like effective Sept 30 Arizona has changed its law to not allow walk-aways. So no matter what the money that we worked hard to save for our future ins going to end up in the hands of the banks. Who already have our tax money to help them weather their mistakes and keep home prices from correcting. I don’t know if I’m more depressed or angry…[/quote]

Tax consequence 1:
The sale of a rental property for less than you paid produces a capital loss for tax purposes. The general rule is that the capital loss may be offset against capital gains, which has the effect of eliminating the tax bite for the capital gains. If gains do not exist in the current year to offset against, the loss may be offset against gains in several past years and in future years. You mentioned already that you consult with accountants, who can calculate the dollar effect of the rules as applied to your set of income facts.

Tax consequence 2:
If debt is forgiven for real estate investment property, voluntarily or involuntarily, the amount of debt forgiven is treated as income, and would create some amount of income tax liability, determined by your other income tax facts. This means that money you give to the lender to “pay in full” is not a total loss. Some portion of it (had you not paid it) would have been lost to income taxes. Your total income tax picture would determine what portion. More consultation with accountants.

The profit you made from the sale of your previous house was not money that you worked hard to save. The real estate bubble giveth, and the real estate bubble taketh away.

You should sell the Tempe property and be happy. You are in good shape compared to most people.

[analyst]

[quote=trying2balance]I read this and it looks like effective Sept 30 Arizona has changed its law to not allow walk-aways. So no matter what the money that we worked hard to save for our future ins going to end up in the hands of the banks. Who already have our tax money to help them weather their mistakes and keep home prices from correcting. I don’t know if I’m more depressed or angry…[/quote]

Tax consequence 1:
The sale of a rental property for less than you paid produces a capital loss for tax purposes. The general rule is that the capital loss may be offset against capital gains, which has the effect of eliminating the tax bite for the capital gains. If gains do not exist in the current year to offset against, the loss may be offset against gains in several past years and in future years. You mentioned already that you consult with accountants, who can calculate the dollar effect of the rules as applied to your set of income facts.

Tax consequence 2:
If debt is forgiven for real estate investment property, voluntarily or involuntarily, the amount of debt forgiven is treated as income, and would create some amount of income tax liability, determined by your other income tax facts. This means that money you give to the lender to “pay in full” is not a total loss. Some portion of it (had you not paid it) would have been lost to income taxes. Your total income tax picture would determine what portion. More consultation with accountants.

The profit you made from the sale of your previous house was not money that you worked hard to save. The real estate bubble giveth, and the real estate bubble taketh away.

You should sell the Tempe property and be happy. You are in good shape compared to most people.

[analyst]

[quote=trying2balance]I read this and it looks like effective Sept 30 Arizona has changed its law to not allow walk-aways. So no matter what the money that we worked hard to save for our future ins going to end up in the hands of the banks. Who already have our tax money to help them weather their mistakes and keep home prices from correcting. I don’t know if I’m more depressed or angry…[/quote]

Tax consequence 1:
The sale of a rental property for less than you paid produces a capital loss for tax purposes. The general rule is that the capital loss may be offset against capital gains, which has the effect of eliminating the tax bite for the capital gains. If gains do not exist in the current year to offset against, the loss may be offset against gains in several past years and in future years. You mentioned already that you consult with accountants, who can calculate the dollar effect of the rules as applied to your set of income facts.

Tax consequence 2:
If debt is forgiven for real estate investment property, voluntarily or involuntarily, the amount of debt forgiven is treated as income, and would create some amount of income tax liability, determined by your other income tax facts. This means that money you give to the lender to “pay in full” is not a total loss. Some portion of it (had you not paid it) would have been lost to income taxes. Your total income tax picture would determine what portion. More consultation with accountants.

The profit you made from the sale of your previous house was not money that you worked hard to save. The real estate bubble giveth, and the real estate bubble taketh away.

You should sell the Tempe property and be happy. You are in good shape compared to most people.

[analyst]

[quote=trying2balance]I read this and it looks like effective Sept 30 Arizona has changed its law to not allow walk-aways. So no matter what the money that we worked hard to save for our future ins going to end up in the hands of the banks. Who already have our tax money to help them weather their mistakes and keep home prices from correcting. I don’t know if I’m more depressed or angry…[/quote]

Tax consequence 1:
The sale of a rental property for less than you paid produces a capital loss for tax purposes. The general rule is that the capital loss may be offset against capital gains, which has the effect of eliminating the tax bite for the capital gains. If gains do not exist in the current year to offset against, the loss may be offset against gains in several past years and in future years. You mentioned already that you consult with accountants, who can calculate the dollar effect of the rules as applied to your set of income facts.

Tax consequence 2:
If debt is forgiven for real estate investment property, voluntarily or involuntarily, the amount of debt forgiven is treated as income, and would create some amount of income tax liability, determined by your other income tax facts. This means that money you give to the lender to “pay in full” is not a total loss. Some portion of it (had you not paid it) would have been lost to income taxes. Your total income tax picture would determine what portion. More consultation with accountants.

The profit you made from the sale of your previous house was not money that you worked hard to save. The real estate bubble giveth, and the real estate bubble taketh away.

You should sell the Tempe property and be happy. You are in good shape compared to most people.

[analyst]

[quote=trying2balance]I read this and it looks like effective Sept 30 Arizona has changed its law to not allow walk-aways. So no matter what the money that we worked hard to save for our future ins going to end up in the hands of the banks. Who already have our tax money to help them weather their mistakes and keep home prices from correcting. I don’t know if I’m more depressed or angry…[/quote]

Tax consequence 1:
The sale of a rental property for less than you paid produces a capital loss for tax purposes. The general rule is that the capital loss may be offset against capital gains, which has the effect of eliminating the tax bite for the capital gains. If gains do not exist in the current year to offset against, the loss may be offset against gains in several past years and in future years. You mentioned already that you consult with accountants, who can calculate the dollar effect of the rules as applied to your set of income facts.

Tax consequence 2:
If debt is forgiven for real estate investment property, voluntarily or involuntarily, the amount of debt forgiven is treated as income, and would create some amount of income tax liability, determined by your other income tax facts. This means that money you give to the lender to “pay in full” is not a total loss. Some portion of it (had you not paid it) would have been lost to income taxes. Your total income tax picture would determine what portion. More consultation with accountants.

The profit you made from the sale of your previous house was not money that you worked hard to save. The real estate bubble giveth, and the real estate bubble taketh away.

You should sell the Tempe property and be happy. You are in good shape compared to most people.

[temeculaguy]

Or look at it this way, you made 80k from one transaction, put that against the loan in tempe, then you will only owe 40k, you should always be able to rent it for positive cash flow, at the end of the day, when the balance sheet is settled, you kinda win, you have an asset that produces cash, probably will for some time, and in 15 or 20 years you can sell it and send the kids to college with it or send them to school in tempe and let them live in it.

If you could buy it for 40k you would probably do it today, so if you stop considering the 80k as your hard earned money and think of it as a gift from the san diego r/e gods, it will make the sacrifice of it to the tempe r/e gods that much easier.

[temeculaguy]

Or look at it this way, you made 80k from one transaction, put that against the loan in tempe, then you will only owe 40k, you should always be able to rent it for positive cash flow, at the end of the day, when the balance sheet is settled, you kinda win, you have an asset that produces cash, probably will for some time, and in 15 or 20 years you can sell it and send the kids to college with it or send them to school in tempe and let them live in it.

If you could buy it for 40k you would probably do it today, so if you stop considering the 80k as your hard earned money and think of it as a gift from the san diego r/e gods, it will make the sacrifice of it to the tempe r/e gods that much easier.

[temeculaguy]

Or look at it this way, you made 80k from one transaction, put that against the loan in tempe, then you will only owe 40k, you should always be able to rent it for positive cash flow, at the end of the day, when the balance sheet is settled, you kinda win, you have an asset that produces cash, probably will for some time, and in 15 or 20 years you can sell it and send the kids to college with it or send them to school in tempe and let them live in it.

If you could buy it for 40k you would probably do it today, so if you stop considering the 80k as your hard earned money and think of it as a gift from the san diego r/e gods, it will make the sacrifice of it to the tempe r/e gods that much easier.

[temeculaguy]

Or look at it this way, you made 80k from one transaction, put that against the loan in tempe, then you will only owe 40k, you should always be able to rent it for positive cash flow, at the end of the day, when the balance sheet is settled, you kinda win, you have an asset that produces cash, probably will for some time, and in 15 or 20 years you can sell it and send the kids to college with it or send them to school in tempe and let them live in it.

If you could buy it for 40k you would probably do it today, so if you stop considering the 80k as your hard earned money and think of it as a gift from the san diego r/e gods, it will make the sacrifice of it to the tempe r/e gods that much easier.

[Author]

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