How Short Sales and Foreclosures Affect Your Taxes

Whenever you sell a home, you need to calculate your capital gains to determine whether you owe any tax. If you engage in a short sale or your mortgage lender forecloses on your home, the Internal Revenue Service treats it just like a sale. Foreclosures and short sales may also require you to recognize ordinary income if the lender cancels any of your outstanding mortgage balance and you’re ineligible for an exclusion.



a sign in front of a house: How Short Sales and Foreclosures Affect Your Taxes


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How Short Sales and Foreclosures Affect Your Taxes

Short Sales and Foreclosures

Both short sales and foreclosures are usually the result of a borrower’s inability to continue making mortgage payments.

A short sale is where your mortgage lender allows you to sell the home for less than your outstanding loan balance and cancels your obligation to repay the remainder of the loan.

With a foreclosure, the mortgage lender will take possession of the home if

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Renovating? Reduce Frustration With a Short Term Stay Apartment

Are you renovating, remodeling, or enduring major repairs at home? It’s not easy to live in the midst of a renovation. The noise, the dust, the disorder… it can get very wearing on your nerves. And if you’re living in the midst of a home that’s being renovated, there’s a good chance that your living in it during the work will make the whole process take longer than if you could get out of the space and let the workers do as they need…get it done, get it cleaned, and get out of there. Have you considered looking into short term stay accommodations for a month or a few months while the work is taking place?

No, this isn’t to recommend you staying in a hotel. Hotels aren’t very practical for stays longer than a week or two and that’s especially the case if you have a family and / … Read More