Foreclosure and Your Taxes

  Question:  We bought our home in a new Gilbert subdivision six years ago.  Although there has been some appreciation lately, our home is worth only $260,000.  We still owe $380,000 on the mortgage.  After my husband lost his job last year, we finally had to stop making payments, and the foreclosure occurred this February.…

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Life After Death? Extension of Debt Relief?

   Any forgiveness of debt is generally taxable income.  In 2007 during the height of the housing crisis the Mortgage Debt Relief Act was passed.  Under this Act any debt forgiveness after foreclosure or a short sale by a mortgage lender on a loan used to purchase a primary residence, or to make improvements to…

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