Need to "short sell" on my house what are my tax issues if any?

Question

I am in a forclosure situation:
Purchase Price: 275,000 (2004)
Refinanced in 2005 and took out a Heloc
Heloc: 100,000

My estimated price for selling is going to be 330,000. Will I have to pay any taxes on the potential sell of my house. If so are there any ways out ie: proving financial hardship.

Answer 1

You will have a gain on the sale of about $55,000 ($330,000 - $275,000). Whether this will be taxable or not will depend upon the facts however you should qualify for the exclusion if you lived in the home for at least 2 years.

On the short sale you may have a debt forgiveness. How much that will be will depend upon the wording of your mortgage and the HELOC and the total debt oustanding. If the mortgage and the HELOC are without recourse, there will be no debt fogiveness and therefore no taxable gain. If they are with recourse, the total debt less the sale proceeds will determine the forgiven debt and the taxable gain.

The gain on Cancellation of Debt is not subject to the capital gain exclusion. You can avoid the tax bite on it if you were insolvent at the time of the COD. You are insolvent if your liabilities exceed the value of your assets. File Form 982 with your tax return along with a statement of your assets and liabilities immediately prior to the COD to claim exemption from tax on the COD. If the amount of your insolvency exceeds the COD there will be no taxable gain. If it's less, the difference is taxable to you as ordinary income.

Answer 2

Boehner agreed to convey it to a vote . . . it would desire to be defeated or surpassed. My wager is defeat meaning the homestead and Senate will would desire to confer on a compromise. As to the pipeline, first. it is going to no longer be linked to the bill because it is not germane to the optimal purpose of the bill. additionally, Keystone has issued deceptive statements. to illustrate, they say 20,000 jobs, yet their approach of accounting treats each and each year on the activity as greater effective than one activity. to illustrate, 10,000 jobs in year a million and those comparable jobs count extensive form as one greater 10,000 interior the 2d year. So call it 10,000 jobs. One-0.33 to a minimum of one 0.5 would be in Canada, so call it 5000 to 6,six hundred American jobs. as quickly as the pipeline is geared up, which will decrease to 50 everlasting jobs as maximum administration.maintenance jobs would be Canadian. Oil from tar sands is greater corrosive than crude oil. The Keystone a million pipeline has had a background in basically its first year of occupation of leaks and different maintenance issues. In 2010, 22 human beings died in pipeline explosions and one hundred seventy,000 barrels of oil have been lost. the fee of the cleanup replaced into $a million billion, so the fee of environmental crises and cleanups would desire to wipe out the financial earnings of those jobs. additionally, the tar sand oil is envisioned to improve the fee of gas, which might threaten trucking and different gas-based jobs, ensuing in a internet activity loss. those are all factors that would desire to be regarded at before a decision is made on the pipeline.

Answer 3

your tax liability is depend upon your status (single,married) and other certain provisions

then no tax is levied up to 250,000 gain in case of single and up to 500,000 in case of joint return if you are living in this for 2 out of last 5 years

if you are single using this house as your residence for at least 2 years since you have purchased it
then no tax is levied up to 250,000 gain in case of single

if you are married, you and your wife is using this house as your residence for at least 2 years since you have purchased it
then no tax is levied up to 500,000 in case of joint return

if you are single and recently married using this house as your residence for at least 2 years since you have purchased
then you should file separately to claim the exemption up to 250,000 gain

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