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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Re: Need strategy advice, IRS ROR Posted by Ward-CA- on January 10, 2002 at 6:03 PM In Reply to: Re: Need strategy advice, IRS ROR posted by Jim on January 10, 2002 at 5:24 PM : If we know the difference between fair market value and the winning bid, can we predict IRS interest in exercising its ROR? For example, if the IRS believes it will only pocket less than a certain amount or less than a certain % of what it's owed - will it "likely" not bother? I'm interested in a property that might auction for $70-75K and has a FMV of $85-90K. The IRS has a lien of $25K. If the spread is at the extreme ($20K), is it worth it to the IRS to exercise its ROR? =•=•=•=•=•=•=•=•=•=•= Jim, supposedly IRS won’t think of exercising their Right of Redemption unless they can garner at least $20,000 or more towards the amount owed by the delinquent taxpayer. So let’s look at the deal you describe in your post: The highest sum a property will usually sell for at a foreclosure sale is around 80% of its fair market value. Here you state the FMV could be $90K. And 80% of that would be $72K. So if IRS won’t bother to redeem unless it can get at least $20 towards its lien then adding $20K to the redemption amount of $72K means it would hope to open its bidding at its redemption sale at $92,000!! That’s about $2,000 more than 100% of the value of the property and IRS knows that would never go that high. So my analysis is that IRS won’t exercise their ROR on this deal. Follow Ups: Post a Followup: Name : E-Mail : Subject : Comments: : : If we know the difference between fair market value and the winning bid, can we predict IRS interest in exercising its ROR? For example, if the IRS believes it will only pocket less than a certain amount or less than a certain % of what it's owed - will it "likely" not bother? I'm interested in a property that might auction for $70-75K and has a FMV of $85-90K. The IRS has a lien of $25K. If the spread is at the extreme ($20K), is it worth it to the IRS to exercise its ROR? : =•=•=•=•=•=•=•=•=•=•= : Jim, supposedly IRS won’t think of exercising their Right of Redemption unless they can garner at least $20,000 or more towards the amount owed by the delinquent taxpayer. : So let’s look at the deal you describe in your post: : The highest sum a property will usually sell for at a foreclosure sale is around 80% of its fair market value. Here you state the FMV could be $90K. And 80% of that would be $72K. So if IRS won’t bother to redeem unless it can get at least $20 towards its lien then adding $20K to the redemption amount of $72K means it would hope to open its bidding at its redemption sale at $92,000!! That’s about $2,000 more than 100% of the value of the property and IRS knows that would never go that high. : So my analysis is that IRS won’t exercise their ROR on this deal. Optional Link URL: Link Title: Optional Image URL: [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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