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Short sale forgiven debt...2014 if congress does not extend the Mortgage debt relief

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daveyt11

Junior Member
What is the name of your state (only U.S. law)? OHIO

I am in process of a short sale...assuming congress does not extend the mortgage relief act...my forgiven debt will be taxable...if the short sale goes through..is it too late for bankruptcy? I will not be able to use the IRS insolvency because I have a 401k that will be considered an asset in their eye...not in bankruptcy. Thanks
 


tranquility

Senior Member
1. What is your basis?
2. How much will the house sell for?
3. How much is the loan?
4. Is the debt recourse or non-recourse or is it a bit of both?
 

daveyt11

Junior Member
Answers

Thanks for responding

The basis for the sales is a death in the family and having to financially support my mother, father passed in November. The house will sell for 20k ..i owe 90K...neighborhood went down hill over the years. and OHIO is a RECOURSE state so it is recourse. My goal is to protect having to take $20000 outta my 401K to pay taxes
 

Ohiogal

Queen Bee
Thanks for responding

The basis for the sales is a death in the family and having to financially support my mother, father passed in November. The house will sell for 20k ..i owe 90K...neighborhood went down hill over the years. and OHIO is a RECOURSE state so it is recourse. My goal is to protect having to take $20000 outta my 401K to pay taxes
That is NOT what he means by basis.
 

daveyt11

Junior Member
answer

Thanks for responding

The basis for the sales is a death in the family and having to financially support my mother, father passed in November. The house will sell for 20k ..i owe 90K...neighborhood went down hill over the years. and OHIO is a RECOURSE state so it is recourse. My goal is to protect having to take $20000 outta my 401K to pay taxes
 

LdiJ

Senior Member
Thanks for responding

The basis for the sales is a death in the family and having to financially support my mother, father passed in November. The house will sell for 20k ..i owe 90K...neighborhood went down hill over the years. and OHIO is a RECOURSE state so it is recourse. My goal is to protect having to take $20000 outta my 401K to pay taxes
Davey, your basis is the 110,000 your father paid for the home.

In any case, the way to determine insolvency is to do a net worth statement. (google net worth statements and you will find lots of detailed examples and forms you can download. Basically insolvency is the difference between your total assets and your total debts at the time that the debt was cancelled.

How much do you have in your 401k?
 

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