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What are the tax implications after your property has been foreclosed on and how does that affect an income tax return?
Wiki User
∙ 16y ago
One consideration would be that cancellation of a debt becomes income. However, as you can find in many discussions here, if your foreclosed and the sale of the property does not return enough funds to fully satisfy the debt, the deficiency is normally not forgiven. Instead you remain owing that amount and the lender will presumably continue to try and collect it. However, the portions of previously unpaid debt that are from interest charges on the loan, (when that loan was qualifying for the interest deduction as being on your primary residence (and other factors)), and would have been deductible had you timely paid, should be includable as tax deductible interest costs to you in the period actually paid. Cancellation of debt does not typically apply on the foreclosure of a home, as far as being treated as straight income. A foreclosure is treated the same as the sale of a home. Your cost-basis of the house will stay the same as if you sold the house. The amount of debt forgiven is treated as your sales price. This will create either a Capital Gain or a Capital Loss. It is possible to claim a Capital Loss for your home, to determine if your specific circumstance meets the criteria refer to IRS Publication 523. Complete the worksheet for computing your home's adjusted basis to determine if you have a capital loss or gain resulting from the foreclosure.
http://www.irs.gov/publications/p523/index.html If you end up showing a capital gain, you may still use the home exclusion rules to exclude up to $250,000 of that capital gain ($500,000 for married filing joint). ie. if you lived in the home for 2 of the last 5 years, etc.
Wiki User
∙ 16y ago
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What is tax implications?
When someone states that something has or may have tax implications, that simply means that it may affect the taxes you pay. It's generally used in reference to your federal income tax return filed with the IRS (& state tax return if your state has an income tax). If receiving a prize has tax implications, it would likely mean that you need to report the income on your federal tax return.
Who pay tax on income property?
The owner of the property pays the tax on the income generated by the property. This is known as the "fruit of the tree doctrine."
What tax implications will I face from purchasing a Real Estate Rental property?
Purchasing a rental property can be an excellent tax advantage, actually. YOu will be able to deduct most of your maintenance, repair, interest, taxes, and some travel expenses - similar to running a business, the costs of maintaing the home will be deducted from your actual rental income.
If your net income is 47000 what is your gross income?
Jones bought an income property for which $47,000.00 was deducted from gross income for operating expenses. If the operating expenses are 30% of gross income, the value of the property using a cap rate of 12.5%?
What are the similarities between property tax and income tax?
both based of amount of the value . the higher income and property value determines tax rate
What is tax implications?
When someone states that something has or may have tax implications, that simply means that it may affect the taxes you pay. It's generally used in reference to your federal income tax return filed with the IRS (& state tax return if your state has an income tax). If receiving a prize has tax implications, it would likely mean that you need to report the income on your federal tax return.
You own property how will this affect your payments of child maintenance?
Only if they produce income
What is the duration of Income Property?
The duration of Income Property is 1800.0 seconds.
Does the IRS sell foreclosed homes?
No, the IRS only manages income taxes for people and businesses in the U.S.
Can the IRS withhold your refund if you recently had your house forclosed on?
The IRS cannot withhold the refund if your house is foreclosed on. However, if the mortgage debt forgiveness results in the IRS treating you as having more taxable income, it may reduce or eliminate the refund. If you've recently been foreclosed on, talk to a tax professional to see if it will affect your tax refund.
When was Income Property created?
Income Property was created on 2009-01-01.
Does the staging stay with the income property on the tv show income property?
No it does not. It is removed after filming.
What could happen to a cosigner if the income taxes were not done on a property?
Property does not have an income tax return.
When buying a multifamily home do lenders consider income from the rental unit as part of total income?
If by income, you mean the buyer's income, then the answer is no, the bank will not impute the property's income to you, since you do not yet own the property. If you are asking whether the bank takes the property's income *into account* when you are borrowing to purchase, then the answer is yes. Banks will lend based on the amount of income the property is currently generating.
Who pay tax on income property?
The owner of the property pays the tax on the income generated by the property. This is known as the "fruit of the tree doctrine."
How does a person qualify for a second mortgage?
If they have enough equity in the property and have enough income to take on more debt.If they have enough equity in the property and have enough income to take on more debt.If they have enough equity in the property and have enough income to take on more debt.If they have enough equity in the property and have enough income to take on more debt.
What tax implications will I face from purchasing a Real Estate Rental property?
Purchasing a rental property can be an excellent tax advantage, actually. YOu will be able to deduct most of your maintenance, repair, interest, taxes, and some travel expenses - similar to running a business, the costs of maintaing the home will be deducted from your actual rental income.
