About Taxes: Is Mortgage Forgiveness Taxable?
 | from William Perez
One participant in the tax forums is selling his house short, and asked how what the tax consequences of having his mortgage debt written off by the lenders? There's some good news, bad news, and complicated news ahead.
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In the Spotlight |
Mortgage Forgiveness Tax-Free uo to $2M
Losing your house isn't exactly good news. But at least from a tax perspective, there's some relief. If a lender forgives (cancels) a mortgage debt, that debt is not subject to tax, up to $2 million. The downside: this $2M limit only applies to debt used to buy, build, or improve a house. It does not apply to home equity loans, second homes, or rental properties. This other debt might be tax-free if the borrower is insolvent.
| | New Scam for Tax Rebate Checks
This one just irks me. It's bad enough that we are flooded with fake emails. But some scammers are actually calling people on the phone and pretending to be IRS agents. Remember, the IRS won't email or call you. And if you have any questions whatsoever, you can always call the IRS....read more
| Put Your Tax Rebate to Good Use
My colleague Jeremy Vohwinkle has reminded me that perhaps I am not making the most of my economic stimulus rebate. In an earlier post, I mentioned that I am setting aside my rebate to pay toward my estimated taxes. Jeremy, however, brings up the noteworthy concept that paying down debt or investing for the long-term can provide a better payoff than just spending the money...read more
- Financial Planning Guide Jeremy Vohwinkle
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