If your home is foreclosed, sold at a short sale, or if you give the home back to your lender in satisfaction of your debt, IRS Tax Fact 10 tells us to watch for a 1099-C or 1099-A statement in the mail during the next calendar year.  Lenders are required to send the 1099 forms [...]

Most home lenders, banks and government agencies are required to notify you and the IRS if they cancel all or a part of your debt.  This is done by the issuance of  Form 1099-C or, at times, Form 1099-A.  By law, these forms must show the amount of debt forgiven and the fair market value [...]

The IRS wants you to know, in Tax Fact 7, that you must use Form 982 in order to claim that forgiven mortgage debt should not be included in your income for tax purposes.  IRS Form 982, entitled “Reduction of Tax Attributes Due to Discharge of Indebtedness” must be attached to your federal income tax [...]

In explaining tax on mortgage debt forgiveness, the IRS stresses, as tax fact number 6, that proceeds of refinance debt used for purposes, other than buying, building, or making a substantial improvement in the principle residence, do not qualify for exclusion from income if the debt is cancelled.  This can be important.  Many lenders require [...]

IRS tax fact number 5 tells us that refinanced debt proceeds used for the purpose of substantially improving your personal residence qualify for exclusion from income if the debt is later is cancelled.  In other words, if you re-finance your principal residence home mortgage and use the excess funds (the portion not used to pay [...]

Mortgage debt forgiveness is considered to be income unless it is excluded.  Principal residence debt has its own exclusion from income if it is cancelled or forgiven by the lender.  To “qualify” it must be what is defined by the Internal Revenue Service as “qualified principal residence debt”.  The debt must have been used to [...]

In order to qualify for full exclusion from income when debt is cancelled on the taxpayer’s principal residence, the amount of debt cancelled cannot be more than two million dollars for a married couple or individual; or if an individual is married but filing a separate return, the debt cancelled cannot be more than one [...]

The IRS wants taxpayers to know about the Mortgage Forgiveness Debt Relief Act of 2007.  In the waning weeks of 2007, Congress passed and President Bush signed into law this remedial legislation.  Initially limited to tax years 2007, 2008 and 2009, the law was intended to prevent debt cancellation tax for unfortunate home owners who [...]

Home foreclosure numbers are growing despite (inadequate) government efforts to stem the tide.   Due to falling prices and a floundering economy more homes are likely to be lost in the future.  The Mortgage Forgiveness Debt Relief Act of 2007 provides some relief from possible tax liability associated with foreclosure.  With this in mind, the [...]

An investigation into a foreclosure defense will include tracing the rights to a mortgage and its underlying promissory note.  MERS is very careful to only execute assignments of mortgages and not of notes.  I’ve never seen it assign a note, and I’m reliably informed that MERS’ bylaws prohibit it from owning rights to a note.
(A promissory [...]