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[QUOTE]Originally posted by turbo50: [QB] [QUOTE]Originally posted by N8: [qb] [QUOTE]Originally posted by turbo50: [qb] [QUOTE]Originally posted by N8: [qb] [QUOTE]Originally posted by turbo50: [qb] What about the state taxes that come into play when being foreclosed on? [/qb][/QUOTE]All that is wiped away. And becomes the responsibility of the bank. Which is why the bank will try to rub that off on any potential future buyer. I am so close to bouncing on 2 of our properties. But I will do the nice thing and let my tennant stay there as long as they can rent free. [/qb][/QUOTE]Not true. This is what happened to him: Income Taxes. It might seem strange to discuss income taxes for someone facing foreclosure, but if a deficiency judgment is granted and then forgiven by the bank or lender, the amount is treated as income and is subject to taxation. Not only can this take many by surprise, but it often results in a higher tax bracket for the entire household– a consideration that could lead to potential federal tax liens or other serious debt obligations that cannot be easily eliminated, even when filing for bankruptcy protection. [/qb][/QUOTE]Ok that is understandable, I understand the possibility of capitol gains tax and what you outlined. But a FC is just walking on the debt and not asking for a forgiveness on anything. Sounds like you are referring to a Short Sale. Or some kind of gov't program. [/qb][/QUOTE]Ok so ill explain....you walk away...foreclosure....the bank gets a deficiency judgement....you file bankruptcy or do what you gotta do so they dont attach your paycheck...they (bank or lender) forgive the deficiency judgement...that amount say 100,000 is treated as taxable income..... This is what happened to my buddy. [/QB][/QUOTE]
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