Tag Archive for Form 1099C

The Ins And Outs of Foreclosure (Part 4)

Tax Consequences of Foreclosures –

When a foreclosure or repossession is made there are tax consequences in addition to the legal and monetary issues. When a piece of collateral is seized in place of a debt, it is deemed a sale of the property and must be reported like any other sale.

For recourse loans, the amount of the realized gain is:

the lesser of the debt immediately before the seizure reduced by any amount of the loan the debtor remains liable for after the seizure

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