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Tax ramifications on "Deed in lieu of" and "Short Sale" of a mortgaged home

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Eaglelvr

Junior Member
Tax ramifications on "Deed in lieu of" and "Short Sale" of a mortgaged home

What is the name of your state? Colorado

Can someone please tell me what the tax ramifications will be on a Deed in lieu of or a short sale of a mortgaged home.

We will not make any profit off of either, but will we still have to pay taxes on it?

Thanks in advanced!
 


Snipes5

Senior Member
Sure, if you tell me what a "short sale of a mortgaged home" is.

What matters is how long you have owned the home, whether or not you rented it out, if you lived in it, and for how long.

The fact that you have a mortgage on it is completely immaterial.

Snipes
 

Eaglelvr

Junior Member
A short sale is when the mortgage company allows you to sell your property for less then the mortgaged amount and forgives the rest of the debt. A deed in lieu of is when you just give the property back to the mortgage company and they sell and get what they can for it.
 

Snipes5

Senior Member
I believe if debt is forgiven and you surrender property, there is no tax liability.

You may want to check this in the "mortgages and foreclosures" section of the boards.

Snipes
 

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