DoI have to file bankruptcy in order to avoid paying taxes on the foreclosure of my home?
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
DoI have to file bankruptcy in order to avoid paying taxes on the foreclosure of my home?
Asked on February 14, 2012 under Bankruptcy Law, California
Answers:
Mark J. Markus / Mark J. Markus, Law Offices of
Answered 12 years ago | Contributor
Bankruptcy is a way to avoid the inclusion of forgiven debt in your gross income, but you should check with a real estate or tax attorney regarding whether there would actually be any potential tax liability in your situation. In most cases, it is only junior mortgages that either come after you for a deficiency judgment, or issue a 1099 for forgiveness of debt income, and there's new federal laws governing under what circumstances they can do that, so it's important to find that out before deciding on your best option.
If you have multiple properties, the timing of the foreclosure in relation to any bankruptcy case can also be critical, so you will want to get the opinion of a bankruptcy tax expert to determine the optimal strategy for you.
Mark J. Markus, Attorney at Law
Handling exclusively bankruptcy law cases in California since 1991.
http://www.bklaw.com/
bankruptcy blog: http://bklaw.com/bankruptcy-blog/
Follow Me on Twitter: @bklawr
IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.