[dfwgator]

"WOOOOOHOOOOOOOOOOOOOOO!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!! I just got my letter!!!!! $15,000.00 or 10% whichever is greater!!! I just settled 140K for 15K!!!!

Wait until the tax bill comes, isn't that treated as income for tax purposes?

[Freedom_Is_Not_Free]

No, they changed the laws so that this is now forgiven. You don’t owe any tax on it.

[rumrunner]

The guy got the release from Citi already. It’s a done deal.

That forum has legions of people saying they have no intention of paying, but we’ll drag it out and live rent free for 12 months, 18 months.

With respect to taxes, even if they issue a 1099, big deal. He’ll only pay taxes on income which he did not earn. Most won’t have to pay taxes because your government passed a law saying purchase money mortgages (which includes 80/20) if settled short, do not give rise to taxable income.

[RobRoy]

>>Wait until the tax bill comes, isn’t that treated as income for tax purposes?<<

I believe it is. Except I suspect it is more complicated. After all, the borrower gave back what he got the loan for.

[usconservative]

Wait until the tax bill comes, isn't that treated as income for tax purposes?

Yep, the bank 1099's him for the difference as the IRS considers it "ordinary income."

Now when in my life did I ever think I'd be cheering the IRS against assholes like this guy?