so when will congress have to decide?......

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lasonia

LoanSafe Member
Apr 15, 2012
7
0
0
The mortgage debt relief act expires 12/31 of this year. Anyone have an idea of when congress can find it in their "busy day" to decide if they are extending it or not? Do they wait till the last minute? Our whole game plan is pretty much riding on this. No extension.....no walking
 

sensemakedollars

LoanSafe Member
May 19, 2012
3
0
0
Florida
This will obviously be a hot topic with the election closing in. I'm not counting on this being extended, although my hopes are that it will be. I am trying to complete my business with the bank prior to 12/31. It would be easier for me to absorb the financial loss with the short-sale than it will to have to deal with a 1099 for $150k +. The banks will certainly use this as a tool to apply preasure on homeowners in the coming months.
 

lasonia

LoanSafe Member
Apr 15, 2012
7
0
0
you are lucky you are already in process. I am sooooo mad at myself for being reluctant to join the rest of america and walk away. As I watched all my friend do it I just sat back and shook my head. Now I am the fool who will be stuck into retirement with this piece of crap house. ugh
 

shayl475

LoanSafe Member
Sep 10, 2010
185
1
0
When my home foreclosed, the bank entered a full credit bid at the foreclosure auction. This is the amount listed on the 1099 as Fair Market Value, therefore there was no cancelled debt and and no taxes. Not everyone gets a full credit bid so you can't count on it, but it is a possibility.
 

candacededelta

LoanSafe Member
Mar 26, 2012
95
1
8
Arizona
Have you checked with an accountant to see if you would qualify for insovency? That's what I did before I started this walk. If you are insolvent you might be able to cancel most or all of the possible IRS debt. Personally i believe the MDRA will be extended but that might be at the last minute. Candace
 
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sonickitty

LoanSafe Member
May 9, 2012
39
1
0
This will obviously be a hot topic with the election closing in. I'm not counting on this being extended, although my hopes are that it will be. I am trying to complete my business with the bank prior to 12/31. It would be easier for me to absorb the financial loss with the short-sale than it will to have to deal with a 1099 for $150k +. The banks will certainly use this as a tool to apply preasure on homeowners in the coming months.
I read that Obama wanted to include extension of the Mortgage Debt Relief Act in his 2013 budget, but I can't find anywhere online that says when this budget needs to be finalized. Without this, I'd be screwed with shortsale or foreclosure post 2012. I did some insolvency calculations based on examples on IRS website - and the amount I would owe would outweigh any benefit of getting out. If anyone has any updates - please post! Thaks!
 

Cat Damiano

Mortgage Wars
Sep 10, 2007
10,541
39
48
Colorado
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doneinca

LoanSafe Member
Aug 3, 2012
37
0
6
Have you checked with an accountant to see if you would qualify for insovency? That's what I did before I started this walk. If you are insolvent you might be able to cancel most or all of the possible IRS debt. Personally i believe the MDRA will be extended but that might be at the last minute. Candace
I have a recourse loan on a rental that I am walking from in CA. I plan on filing insolvency when the forclosure takes place. We just missed our first payment this month so we have a 9 month to a year or more before the forclosure takes. I spent some of our savings trying to save this house but saw no end in site, so we are walking with money left in the bank. Doing the calculations, we will be insolvent for part and will owe taxes on part. Did your CPA advise on how you have to document your assets? If I try to lighten the bank account now, will the IRS see that as some kind of fraud? We have some work that needs to be done on the house we are keeping but worry that if we spend the money now, we get in trouble later. What difference is spending the money now vs taking it out and saving the cash and not reporting it as an asset. I know not reporting it is fraud. So is spending it, knowing that will make us insolvant and therefore would keep us from paying taxes on the COD also fraud?
 

candacededelta

LoanSafe Member
Mar 26, 2012
95
1
8
Arizona
Hi doneinca,

In my situation my salary is now so low and my debts so high that I am not really saving a great deal of cash. When I knew I was going to have to walk I called my CPA and he assured me I will be able to eliminate or at least reduce any tax debt. I don't have much in the way of assets anymore.

Hopefully another member will chime in with answers to your questions.

Good luck,
candace