Income Tax Filing Question?

Question

In 2006, we went through a "deed-in-lieu-of forclosure" Since we did not actually sell our home, but deeded it back, will this need to be reported when we file our taxes?

Answer 1

Am not familiar with the "deed in lieu" thing you mention but it sounds like you have no tax liability. If this was your main home you would only incur taxes if you had lived in it less than two years and sold it for a profit. On a main home if you lived in it longer than two years you could sell it and make $ 500,000.00 profit and on a married, filing joint return own no tax whatsoever. I get the feeling you didn't make a profit on the deal. Sort of like living in Montana where some get the mine and others get the shaft.

Answer 2

No. When you do a deed in lieu of foreclosure, you are deeding the property to the lender in exchange for cancelling of the outstanding debt. Since the outstanding debt is most likely to have been less that what you originally paid for the property, then you would have realized a loss on the sale (if it was a true sale), and a loss on the sale of a personal asset is considered a personal loss and is therefore nondeductible.

Answer 3

Not unless you received money from the transfer of ownership, which executing a deed in lieu probably not. You can go to the IRS web site at www. irs.gov or call 24 hours a day at 1-800-829-1040 for specific information directly from the IRS.

Answer 4

Just recently turned in leased vehicle, lesor paid property taxes for lease time frame, now we have to pay up 1100.00 in past taxes, can we claim on 2015 return?