Wondering if i can write off this year my property taxes paid and my interest on mortgage paid ? even if im in default and most likely will need to foreclose ?
2007-08-23 11:16:23 · 6 answers · asked by michelle p 1 in Business & Finance ➔ Renting & Real Estate
You can deduct the taxes that you paid in the year that you paid them (i.e. 2005 taxes paid in 2006 can be deducted on 2006 taxes) if you file itemized. Your mortgage interest is deductible as well.
I do not believe that you can deduct the interest or penalty. It is a deduction for "other taxes paid."
2007-08-23 11:24:59 · answer #1 · answered by mdesertbound 3 · 0⤊ 0⤋
I'm sorry you are in this position, but that is an interesting question...
I would think you could write off any taxes that are attributed to the time in which you were in the home. After the lender takes possession, it becomes the lender's responsibility to pay the taxes, so you cannot claim the expense.
In actuality, you will be refunded the money you paid for the time you will no longer own the home, just like if you had sold the home to someone. But in your case, the refund will go towards the escrow which will go towards repaying the lender for money lost.
Your deduction should be the pro-rata amount of taxes for the time you had possession of the home. Even though you foreclosed, your lender should send you a statement at the end of the year showing that amount.
2007-08-23 11:25:22 · answer #2 · answered by CJKatl 4 · 0⤊ 1⤋
Michelle, now did you pay those? If you didn't make your mortgage payments and you aren't now, then how can you claim that on your taxes? I wouldn't mess around with the IRS if I were you. Did you know that the mortgage company can file a 1099 on your taxes to the IRS for losses they have incurred due to your default? Thereby grossing up your overall gross income for the year? And you would be required to pay taxes on that amount and what you actually earned. Are you ready for that little bit of news?
I'm not trying to be mean or nasty, I just want you to take responsibility for your actions. I'm curious why is it so easy for you to let go of your home? Why are you willing to lose your home, ruin your credit history and chance a big tax bill?
If there is any chance that you could stop this action, by working with your lender, would you call them today? I'd do it. Also, HUD has approved this counseling service for free, they are there to help homeowners with problems like yours. Call them 888-995-HELP. Do it sweet heart, don't lose your home.
2007-08-23 11:49:53 · answer #3 · answered by Alterfemego 7 · 0⤊ 1⤋
If you didn't pay it, you can't deduct it. You can deduct mortgage interest and real estate taxes that you actually paid, even if the home is foreclosed on that year.
2007-08-23 11:43:02 · answer #4 · answered by Judy 7 · 0⤊ 1⤋
M, the taxes & interest & maintenance can be written off in the subsequent yr for the yr prior.
Anything you pay others for the work done on/or expense of a home is written off, but only what you pay and can substanuate with documented proof, like cancelled checks.
2007-08-23 11:31:59 · answer #5 · answered by CW L 3 · 0⤊ 1⤋
I would say yes, the law is you claim it the year you paid for it. The foreclosure has nothing to do with what you have paid.
2007-08-23 11:21:00 · answer #6 · answered by libbygail_51 3 · 0⤊ 0⤋