i seperated from my husband and during that time he has pulled out all of the equity and then some. we owe 510 on our house and an offer was just accepted by the mortgage company for 415. my husband is the only one who used the line of equity, although my name is on everything i can prove he used all the money for his failing business. am i going to get sued for some of the money, or can i finally move on with my life in peace not worring about the freekin house and my ex now that the divorce is finnal?
2007-11-01 21:54:55 · 3 answers · asked by genia l 1 in Business & Finance ➔ Renting & Real Estate
I am going through a short sale right now....When I was first inquiring of the short sale they told me I would have to pay the difference back at 0% interest OR they would not make me pay and they would write the difference off at the end of the tax year. The only way that I would not have to pay it back would depend on my financial situation at the time of the short sale.
It will hurt your credit but not as bad as a forclosure.
When my short sale was accepted on my house I called them and asked what happens from here....They told me I will owe nothing b/c they are writing off the difference. So you need to call your mortgage co and ask. They will be doing one or the other. It will be better to find out now.
2007-11-02 03:40:25 · answer #1 · answered by sierra_91_2000 5 · 0⤊ 1⤋
if it is a standard shortsale, then the difference between what is owed and what the bank accepted on the short sale is taxable income for both you and your husband for the year.. upside "sorta" if you have absolute proof of his losses, they can help offset a portion/percentage of that taxable shortsale income for the IRS. Scary ugly side, if your ex husband cannot repay his portion of what will be owed to the IRS, you get to pay it, and viceaversa. THEN you or he can initiate suit against the other for their half of the tax.. You should look into what is termed an offer in compromise, in the event neither of you have the funds to repay such a large debt. The IRS has definative income limits to qualify for the offer in compromise but it's entirely possible that you would qualify. Good luck! Oh if you are interested in the "offer in compromise" just google it. There's ton's of information on it.
2007-11-02 05:13:02 · answer #2 · answered by Creatine Monohydrate 3-5gr daily 2 · 0⤊ 0⤋
The answer to your question lies in your short sale agreement with the lender involved. If you DO engage in a short sale agreement, check the agreement you sign to insure that the lender is going to consider the shortage 'forgiven' and that they will not seek collection through legal means. You might also check to see what they intend to do concerning reporting the situation for credit reporting purposes.
You most probably will be held, at a minimum, to agreement to have the shortage reported to you on Form 1099 as taxable income. At the current time, the IRS still views such reported shortages as valid taxable income.
2007-11-02 08:10:08 · answer #3 · answered by acermill 7 · 1⤊ 0⤋