Posted on 05/10/2010 6:26:23 AM PDT by blam
60 Minutes Runs Feature On Walking Away From Your Mortgage, And Now EVERYONE Wants To Know How They Can Do It
Joe Weisenthal
May. 10, 2010, 9:09 AM
Did 60 Minutes prompt a big cultural and economic moment last night?
The weekly TV news show ran a big feature on strategic defaults, and from what we gather it made strategic defaults look pretty sympathetic.
It also acknowledged that it could undermine the recovery.
Either way, we know LOTS of folks decided they want in on the action. How do we know?
Because all of the sudden we got flooded with search hits from people searching for information on how to walk away from your mortgage.
They were all landing on this handy how-to guide we drew up in January.
Do you want to get in on it? Click here to find out how.
[snip]
(Excerpt) Read more at businessinsider.com ...
I am not a tax accountant; some at FR are.
But you are correct-if you walk away from a mortgage, the IRS considers the mortgage amount taxable income.
“Renting is nothing but throwing money out the window. They’ll have nothing in the end. “
That was the war cry of the real estate agent in the booming mortgage market. Not any more. Real etate agents aren’t exactly the smartest people else they wouldn’t be real estate agents; they’d be brokers.
We sold out home at the height of last year and got a fantastic price for our home. We are renting while prices continue their decline. Why would we buy only to watch the value fall? So far we have seen values drop another $100k on homes we are looking at. Seems we saved $100k minus $9k in tax loses, so $92K or so saved. We’ll buy not before August, the typical downturn in market prices here. Watch and wait. That is the smart move.
“Sorry, keep looking pal. I see how you are.”
“But I’m (handicapped, black, biracial, gay, illegal, bipolar, bisexual, etc.) and you’re discriminating against me!”
Then you get a call from some alphabet soup state agency.
The people who rented this place before us had a 1099 sent here for $225,000 for the home they walked away from. That is a $100,000 tax bill. They owe the IRS $100,000 bucks they way I see it.
We all know that, but these type people will NEVER have anything anyway. They are just too ignorant, live from paycheck to paycheck and have a big case of the WANTS.
I think what happens is that the mortgage company sends out a 1099, a copy to you and a copy to the IRS.
You then can prepare an IRS form to prove that you were legally insolvent at the time of the foreclosure. Basically, you list your assets and your liabilities and do the math. Along with your major assets, you have to figure the value of your furniture, your appliances, and even your clothing.
From what I’ve heard, it’s brutal.
See #26.
Wake up, the bankers tanked themselves by saddling a $50k income family with a $2k mortgage payment.
I am the taxpayer! I’m paying my mortgage every month, and I have absolutely NO plans to walk away from mine. I’m a responsible citizen, thank you very much.
I pretty much agree with that, although the biggest waste in our society is credit card debt. I work with young professionals that have 20 - 30k in credit card debt - at 21% interest. They talk about this stuff like it is nothing, pretty much normal. I'm listening and nearly have a cow. I guess it is a generational thing.
One fellow took has family on a 6k vacation - on plastic. Imagine, 21% on hamburgers you bought on your last trip. You talk about having nothing in the end!
Don’t think there is a Tax Liability, but there used to be a Deficiency Judgement,(the difference between what is owed and what the banks can sell), at least that is the way it USED TO BE. Maybe all forgiven now, who knows.
Me too. Id was screaming at the TV during this segment.
These people CAN afford to make the payments. They have not lost their jobs or had some other major hardship. They are CHOOSING NOT to pay because certain states like AZ do not have the raminfications that most states have. That is someone will come after you for the debt(the difference between your mortgage and the auction sale price of the house). Yes, your credit rating will destroyed.
I was glad to see the Scotsdale resident that was going to keep his house even though he was offsides $350K from the purchase price. It shows his character in relation to these other scumbags.
It’s coming, you want to be a landlord, then you will be required to participate in Section 8.
I suspect they just want to DUMP that piece of crap while the GOV" sanctions it. It will never be worth anything, in fact less each year.
That was changed a couple years ago - if the mortgage is for your residence, forgiven debt isn't income. I believe forgiveness of other debt still is income, however.
Jack
Yes - many states have the Deficiency Judgement law(s) on their books.
But like you wrote - is all forgiven now? I bet if your a ‘protected minority’ is sure the Hell is!!!
True, but if your net worth is still negative after the debt forgiveness, then the income is not taxable. So, like anything else, it is complicated.
I think The Mortgage Forgiveness Debt Relief Act of 2007 gives tax relief to foreclosure victims.
“Because all of the sudden”
This person writes for a living and gets away with using phrases such as “all of the sudden?”
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