Home Equity Loans May Haunt Foreclosed or Short Sale Homeowners
When the home foreclosure crisis started, Congress passed the Mortgage Forgiveness Debt Relief Act so homeowners would not be liable for their canceled debt.
However, people who lost their homes to foreclosure or short sale may still have some tax liability at both federal and state levels. The tax exclusions apply only to money used to purchase, build, or improve a home.
Foreclosed or short sale homeowners who took money out with a home equity loan or cash out refinance for purposes other than home improvement such as, debt consolidation or to buy a car, may have to report that forgiven debt as taxable income.
When home equity was plentiful, many people used their house like an ATM machine using credit lines, home equity loans, or refinancing. If the debt is forgiven by the lender, they may find themselves owing the IRS and the state unless they qualify for an exception because of bankruptcy or insolvency.
Mortgage Loan Rates
However, people who lost their homes to foreclosure or short sale may still have some tax liability at both federal and state levels. The tax exclusions apply only to money used to purchase, build, or improve a home.
Foreclosed or short sale homeowners who took money out with a home equity loan or cash out refinance for purposes other than home improvement such as, debt consolidation or to buy a car, may have to report that forgiven debt as taxable income.
When home equity was plentiful, many people used their house like an ATM machine using credit lines, home equity loans, or refinancing. If the debt is forgiven by the lender, they may find themselves owing the IRS and the state unless they qualify for an exception because of bankruptcy or insolvency.
Mortgage Loan Rates
posted by CRHOME.com at
1:06 PM
1 Comments:
Thanks very much, that is what I have found, I have found some interest only mortgage information too.
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