The difference between the sale price and loan amount, does the bank just take a loss or am I responsible for the difference? Also, the difference between sale price and loan amount, do I get taxed on that and if so, about how much?
2007-07-23 11:32:38 · 4 answers · asked by L 1 in Business & Finance ➔ Renting & Real Estate
You will probably face one of two options. Either the bank will hold you responsible for the deficiency and expect you to make arrangements to pay for it, OR they will issue you a 1099 at the end of the year, indicating that they have written off this amount as uncollectible, and you will be expected to pay federal and state income taxes on the deficiency amount.
2007-07-23 11:38:09 · answer #1 · answered by acermill 7 · 1⤊ 0⤋
as quickly as you get the grant, you will publish that grant to the indoors maximum loan holder alongside at the same time with your financial suggestions. The own loan holder then has the alternative of accepting the grant and letting the living house sale close. you will get a short sale contract from the financial employer whilst they verify to settle for the fast sale grant. they have some selections of what to do. they could refuse the fast sale, they could ask you to pay some area of the dearth, they could forgive the dearth and then provide you a 1099 as debt forgiven, or they could ask you to sign a promissory be conscious for the adaptation which you will pay over the years. you is additionally waiting to settle the dearth for much less interior the destiny if it is an determination. that's as much as them to verify what to grant, and it extremely is as much as you and your agent to barter what could artwork precise for you.
2016-11-10 05:11:44 · answer #2 · answered by ? 4 · 0⤊ 0⤋
Depends on where you live if the bank will come after you for the difference.
I believe all banks must report to the IRS on schedule 1099C whatever debt was forgiven.
You will be taxed as ordinary income (added to your current income) I think congress is working on having this removed.
Hope this helps.
Terry S.
2007-07-23 13:17:17 · answer #3 · answered by Terry S 5 · 0⤊ 0⤋
You are responsible. At least we were. A 40,000 dollar difference! Filing BR in October.
2007-07-23 11:40:52 · answer #4 · answered by Shari 5 · 1⤊ 0⤋