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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Re: If DIL or 4close "less" than I owe, it's not a Cap Gain? Re: The tax is on your gain only (profit or debt relief) [NT] Posted by Greg on September 30, 2006 at 5:29 PM In Reply to: If DIL or 4close posted by Madonna Maka on September 30, 2006 at 4:39 PM Madonna - - You may want to review IRS Publication 523 at http://www.irs.gov/pub/irs-pdf/p523.pdf. Read the "other dispositions" section. After reading this you may then want to discuss the specifics of your situation with a competent tax advisor. In general, no, you will not be taxed on the entire 305K if your lender forecloses. But there likely may be a tax implication from the event. Best of luck. : Hi Rick, than you for responding. I just want to make sure I understand your email. If I DIL or floreclose at less than what I owe, there is NO Capitol Gains? If that is true, you've made my day Rick because my parents and I have been worried sick becuase of what I read about in that other guy's post. He was told that the IRS claims DILs and foreclosures are considered earnings and treated as Capitol gains. Thank you for clearing this up for us. Madonna : : I live in Brooklyn NY. Like an idiot, I regretfully bought a home as an investment to flip in Florida. I tried everything to sell this home. I listed with a reputable real estate company. I was told no buyers. I tried selling at lower than what I owe the bank as for sale by owner. I read blogs about another person in same situation about a Florida home. In the replies it implies that if I do a DIL or foreclosure, that I'll have to pay the IRS capitol gains taxes on the $305,000 I owe the bank if I do the DIL or a foreclosure. Is that true? I can't afford paying taxes on $305,000. I'm ashamed and scared. I can't afford this home anymore. I borrowed money from my parents to make the last 5 months payments to the bank because I didn't flip it like planned. They can't give me any more money or a loan because they are retired on a fixed income. Right now, I have way more bills than earnings. Making matters worse, I had to take a pay cut due to a major reorganization at my job. Is that true about having to pay capitol gains taxes to the IRS if the bank OKs a DIL or foreclosure? I may have to move in with my parents which is totally embarrassing. Please share your thoughts. Madonna Follow Ups: Post a Followup: Name : E-Mail : Subject : Comments: : Madonna - - You may want to review IRS Publication 523 at http://www.irs.gov/pub/irs-pdf/p523.pdf. Read the "other dispositions" section. : After reading this you may then want to discuss the specifics of your situation with a competent tax advisor. In general, no, you will not be taxed on the entire 305K if your lender forecloses. But there likely may be a tax implication from the event. : Best of luck. : : Hi Rick, than you for responding. I just want to make sure I understand your email. If I DIL or floreclose at less than what I owe, there is NO Capitol Gains? If that is true, you've made my day Rick because my parents and I have been worried sick becuase of what I read about in that other guy's post. He was told that the IRS claims DILs and foreclosures are considered earnings and treated as Capitol gains. Thank you for clearing this up for us. Madonna : : I live in Brooklyn NY. Like an idiot, I regretfully bought a home as an investment to flip in Florida. I tried everything to sell this home. I listed with a reputable real estate company. I was told no buyers. I tried selling at lower than what I owe the bank as for sale by owner. I read blogs about another person in same situation about a Florida home. In the replies it implies that if I do a DIL or foreclosure, that I'll have to pay the IRS capitol gains taxes on the $305,000 I owe the bank if I do the DIL or a foreclosure. Is that true? I can't afford paying taxes on $305,000. I'm ashamed and scared. I can't afford this home anymore. I borrowed money from my parents to make the last 5 months payments to the bank because I didn't flip it like planned. They can't give me any more money or a loan because they are retired on a fixed income. Right now, I have way more bills than earnings. Making matters worse, I had to take a pay cut due to a major reorganization at my job. Is that true about having to pay capitol gains taxes to the IRS if the bank OKs a DIL or foreclosure? I may have to move in with my parents which is totally embarrassing. Please share your thoughts. Madonna 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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