if i consider doing a short sale on my home. who is paying taxes end of yr? is it me? We owe 400K less than what buyer is offering, who will get taxed? is it true that we will have to pay? please let me know. is forclosing better! whats the benefit of short sale!
note: were still not late on our mortgage, but, there is no way to pay it anymore, its 7k a month, and NO way to refi, and NO way to SELL!
2007-09-04 18:26:11 · 4 answers · asked by Anonymous in Business & Finance ➔ Renting & Real Estate
I'm a bit confused.....if you owe 400K less than what your buyer is willing to pay, while are you contemplating a short sale? Get it closed and funded and walk away with your cash!
If you meant to say that the buyer is offering 400K less than what you owe, I'd say you will definitely need to contact the lender and advise them of your situation. The lender normally will not consider short sale request until after payment is in default for 1-3 months, but contact your lender's "Loss Mitigation" department or "Homeowner Retention" department and start the dialogue. In my state, the lender will almost always order an appraisal of the home too, just to make sure they're getting as much for it as possible.
Regardless, the loss the lender suffers may in fact be considered your gain, even though you essentially walk away with no cash in hand. And while you could theoretically receive a 1099 from the lender, in the last 9 years that I've been doing short sales, not one of my client has ever received one. So, possible yes, likely no.
If you are referring to property taxes...they will be prorated at the closing table with you giving the buyer credit for the portion of the year in which you had ownership (including the day of closing), unless of course you home doesn't close/fund this year in which case you (if you don't escrow taxes in our payment) or your lender (if you do escrow taxes) will make the payment. Of course, if you don't have the funds to pay the ad valorem taxes, the lender will eventually have to pay those too.
Just remember to contact your lender ASAP and be honest with yourself and the lender. They are dealing with these requests by the hundreds so you'll have to be patient
2007-09-04 19:20:23 · answer #1 · answered by liveinaustin 3 · 2⤊ 0⤋
If you do not reinvest in another home, you'll pay capital gains of the profit from the original sale price and the short dsale amount. You have 18 months to reinvest or you can take a 1-time profit from the sale (no capital gains) of up to $250k each (since you said "we" I assume there are 2 of you)
2007-09-04 18:36:26 · answer #2 · answered by Anonymous · 0⤊ 0⤋
A short seller is selling for less than the debt so the difference is taxed to the seller since it is a forgiveness of debt.
I heard there was a bailout that eliminated that tax but I don't know if it passed.
2007-09-04 18:35:42 · answer #3 · answered by shipwreck 7 · 0⤊ 0⤋
save song of those issues: a million. products which you purchase for resale. the products which you have in inventory. 2. costs: Samples given away. sturdy point promoting offered. promoting. mileage. vehicle costs. employer playing cards and brochures. components. be conscious: a million. you are able to deduct the employer mileage or the easily vehicle costs, yet no longer the two. 2. you're waiting to declare which you have a house workplace, and deduct a number of your lease, utilities, telephone, information superhighway, etc costs. you like a sturdy tax preparer that can assist you you each and every 365 days... playstation ..I propose a separate checkbook for the employer, and placed all your income and costs by means of that checkbook.
2016-12-16 11:48:35 · answer #4 · answered by kirk 4 · 0⤊ 0⤋