IRS and “forgiven” mortgage amount(s) -

Real Estate Agent with The Paul Paterakis Power Team-Remax Showcase Homes For Sale

IRS Mortgage Forgiveness - PowerTeamHomes.comSome of you keep asking if the IRS will go after stressed sales homeowners for the

forgiven amount they did not pay via the sale of their home that closed for much less than the mortgage
note. Back in 2010 and reported on our Monday’s MEMO’s we gave you the details on it: a two
(2) year “stay” on that making it to December 31, 2012.

However, the IRS came up with certain restrictions on it (as they always do), and will review
each case independently based on the following and more:
• Amount forgiven vs. amount actually owed on the mortgage
• Value of home regardless of loan amount
• Homeowner tax bracket and other possible assets owned
• Possible taxable “recovery” elsewhere from the homeowner

Again, the IRS’s list is a lot longer but for them the idea is simple: if you are finished, no money,
on the street/rental, no job, on welfare etc your chances of total forgiveness are very high. If you
still own other assets and they see that you can quickly come back up…the IRS will tax the short
sale part of the forgiven loan and the tax will need to get paid. Always refer to your Attorney, CPA,tax specialist.

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