What Are The Tax Penalties?
Go to www.irs.gov You will see that if this is your primary home, the federal government will forgive the income taxs that is ordinarily due on forgiven debt. In other words, the IRS considers forgiven debt as income. If this is not your primary home, you may be liable for taxes on the forgiven debt. You will need to go back to the terms of your mortgage to see how the home is classified. If you bought it as a rental property, the mortgage will specify that and the IRS will assess income tax on the debt that is forgiven. There are ways to resolve that tax. You will need to talk with an accountant about those strategies. I Received A Memo From My HOA Stating That If The Property Goes Into Foreclosure, They Can Come Back For Other Costs. How Does This Work? The HOA would rather have a short sale than a foreclosure. They are threatening you with fees in the event of a foreclosure because they don’t want a foreclosure. They want a short sale, which has a different process and outcomes. If
