The Home Blog

Homeowners in a tax bind, even in foreclosure

As a home owner who bought and sold at the top of the market, I'm paying for that through higher property taxes (almost triple what the previous owner paid for the same property). But that's small change compared to the tax bill some home owners will reap.

Well make that former homeowners. Contra Costa Times checks into the little known fact that even those who talk their bank into a short-sale might be stuck with having to declare that relief as taxable income.

“Homeowners should know that although debt can be forgiven, it’s never forgotten. When a short sale, deed-in-lieu agreement or foreclosure occurs and a residential lender loses money on a loan, the lender will most likely file the loss with the IRS, and the former homeowner may end up owing thousands of dollars in taxable income.”

“‘That’s probably where we see kind of the biggest surprise on the part of our clients,’ said Jackie Pearlman, senior tax research coordinator for H&R Block. ‘Not only are they not aware it existed but are very surprised to understand that it’s income. The concept is really alien to many people.’”

If this looks likely to happen to you make sure you consult a competent tax attorney prior to signing any papers with the bank.

Winning Dream Home Not Always A Dream

MSNBC takes a look at the HGTV 'Dream Home' contest and the effect it has had on the lives of the past 9 winners. Here's a clue, only two have even attempted to live in the dream home. Taxes and upkeep are just too much for the average contest winner.

Nevertheless, I'm entering every day. How about you?

[ Tags: home, dream+home, hgtv, contest, winner, lotto, lottery, taxes ]

Bush: For or against home ownership for all?

As part of his inauguration address President Bush stated he wants the dream of home ownership to be obtainable by everyone. His dream may be coming true, but not the way he thinks. Here in Las Vegas, over in Orlando, and probably in your neck of the woods, we're experiencing the phenomenon of condo-ization. That is apartment complexes being turned into condominiums. Las Vegas generating many new home owners this way, but it is rapidly running out affordable apartment living too.

Over at Realty Times Blanche Evens posits that the White House will be looking at the perceived profits being made in the housing market for some backdoor taxes to implement. Reducing or removing the mortgage interest tax exemption would do just that. Combine that with an increase in home ownership and you have a new tax base. Easy as pie.

Thanks to the excellent Realestates blog for the pointer.

[ ttags: taxes, realestate, home, housing, apartments, condos, bush, mortgage ]