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Homes ,,,, when ur losing ur home or going thru a ...

Homes ,,,, when ur losing ur home or going thru a short sale ..How does it work as far as taxxes go do they come after ur taxxes u pay as u still got a home?


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Are you talking about federal income taxes or real estate taxes ?

If federal income taxes, lenders may or may not send notice to the IRS for amount forgiven if you sell your home short.

For example: say you owe $200k and the house sells via short sale accepted by lender for $100k. The lender has "forgiven" the debt owed to them of $100k.

They may or may not pursue a deficiency judgment and try to collect. if they don't,  they may report the forgiven amount as income to you to the IRS in which you may get a federal income tax bill for taxes owed on the forgiveness.

it's really up to each individual lender whether they report this or not.

If you are talking about property taxes, if your taxes/insurance are escrowed, the lender has an obligation to pay the taxes/insurance if you cannot afford them.

If the property is sold the new owner would have to clear up any back taxes or the lender would have to clear them up for the property to go to settlement.

Once sold you shouldn't have any real estate tax liability since you no longer own the property.

Hope that helps.

 

Posted 2009-08-13T17:49:32Z
toddw was invited by Yedda to answer this question.

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So it will b d new owners responsibilty  to pay d bad taxes or just contact d irs correct

Posted 2009-08-13T21:56:42Z
 

federal income tax is the taxpayer responsibility in theory. if there is personal tax due you would be notified by IRS

real estate taxes are the property owner's responsibility. back taxes should get paid out of the sale proceeds or will have been paid by the lender already if your loan is escrowed. The new owner will be responsible for any new tax assessment

Posted 2009-08-13T22:51:44Z
toddw was invited by Yedda to answer this question.

 

Property taxes go with the property and as a titled owner are your responsibility.  When title passes so do the taxes.  As far as coming after you it has been my understanding in dealing with foreclosures that they do not come after you but that the lender or the one foreclosing pays taxes to date of close when property does sell. Hopes this helps answer your question

Posted 2009-08-19T17:47:16Z
Cathy was invited by Yedda to answer this question.

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