.jpg)
Postpetition Deed in lieu - tax consequence?
Hawaii is a recourse state.
Sent from my iPhone
On Nov 4, 2011, at 7:23 PM, "Curt Harrington" wrote:
> First I am assuming that the condo loan is recourse. If it is non-recourse, further tax consequences are not immediately obvious to me at this time.
>
> If the loan is recourse, then Yes, there are tax consequences.
>
> Stating it simply: non-judicial foreclosure will cut off the deficiency before it has a chance to be relieved in bankruptcy. Thus, the debt relief will not occur pursuant to title 11 and the reduction of tax attributes will not enable the government to "recapture" the debt cancellation in future years via reduced basis.
>
> A "deed in lieu" would leave the cancellation of a recourse loan & its cancellation of indebtedness under title 11 and force a reduction in attributes under IRC 108(b) relating to IRC 108(a)(1)(A)
>
> Generally:
>
> Even under bankruptcy, IRC section 108 requires the reduction of tax attributes. These include:
>
> IRC 108(b)(2)(A) reduction of NOL's
> IRC 108(b)(2)(B)-(G) reduction of general business credit, minimum tax credit, capital loss carryovers, basis redution (in other property), passive activity loss and credit carryovers and foreign tax credit carryovers.
>
> Non-judicial foreclosure operates under California Law to "turn a recourse debt into a non-recourse debt, for tax purposes only. There has been a lot of controversy on this matter as evidenced by articles in Volume 20, No.s 1 & 2 of the California Tax lawyer in 2011, as well as an article by Boutris and Epstein "Tax Consequences of Non-Judicial Foreclosure" which appeared in the Contra Costa Lawyer magazine Sept 28, 2010 and in the California Bar's Tax Section, Litigation subsection newsletter attached below.
>
> The "conversion to non-recourse" as it is popularly known, occurs through California Code of Civil Procedure section 580(d)
>
> 580d. No judgment shall be rendered for any deficiency upon a note
> secured by a deed of trust or mortgage upon real property or an
> estate for years therein hereafter executed in any case in which the
> real property or estate for years therein has been sold by the
> mortgagee or trustee under power of sale contained in the mortgage or
> deed of trust.
> This section does not apply to any deed of trust, mortgage or
> other lien given to secure the payment of bonds or other evidences of
> indebtedness authorized or permitted to be issued by the
> Commissioner of Corporations, or which is made by a public utility
> subject to the Public Utilities Act (Part 1 (commencing with Section
> 201) of Division 1 of the Public Utilities Code).
>
> However California Code of Civil Procedure section 580.5. (b) With respect to an obligation which is secured by a mortgage
> or a deed of trust upon real property or an estate for years therein
> and which is also supported by a letter of credit, neither the
> presentment, receipt of payment, or enforcement of a draft or demand
> for payment under the letter of credit by the beneficiary of the
> letter of credit nor the honor or payment of, or the demand for
> reimbursement, receipt of reimbursement or enforcement of any
> contractual, statutory or other reimbursement obligation relating to,
> the letter of credit by the issuer of the letter of credit shall,
> whether done before or after the judicial or nonjudicial foreclosure
> of the mortgage or deed of trust or conveyance in lieu thereof,
> constitute any of the following:
> (1) An action within the meaning of subdivision (a) of Section
> 726.
>
> Thus there is no single action (or action at all) and no cutting off of the debt by "conversion to non-recourse" under 580(d).
>
> Thus it is my understanding that even if in bankruptcy, a deed in lieu of a debt that was a recourse debt will require the filing under IRC section 108 of a statement of reduction of attributes which will cost them in future.
>
> Therefore it would seem that as I read all these articles and reasonings, that because non-judicial forclosure extinguishes the state source of the obligation (making the debt non-recourse from a tax standpoint only) that it eliminates the need for sec 108 attribute reduction.
>
> I also direct you to IRS Pub 4681 where abandonment (foreclosure) is distinguished from deed-in-Lieu.
>
> Hope this helps.
>
> Curt Harrington
> http://patentax.com
> (I will try to attach the Lit Section email if I can)
>
> --- In cdcbaa@yahoogroups.com, Holly Roark wrote:
> >
> > Client is surrendering a deeded time share. Lender has provided deed
> > in lieu documents. Discharge has not yet been entered but we expect
> > the debtors will receive a discharge. Is there a tax consequence to
> > the debtors signing the postpetition deed in lieu?
> >
> > --
> > Sent from my mobile device
> >
> > Holly Roark
> > holly@...
> > www.roarklawoffices.com
> > Central District of California
> > Consumer Bankruptcy Attorney
> > 1875 Century Park East, Suite 600
> > Los Angeles, CA 90067
> > T (310) 553-2600
> > F (310) 553-2601
> >
>
>
Hawaii is a recourse state.Sent from my iPhoneOn Nov 4, 2011, at 7:23 PM, "Curt Harrington" <boomersooner@mail.ru> wrote:
First I am assuming that the condo loan is recourse. If it is non-recourse, further tax consequences are not immediately obvious to me at this time.
If the loan is recourse, then Yes, there are tax consequences.
Stating it simply: non-judicial foreclosure will cut off the deficiency before it has a chance to be relieved in bankruptcy. Thus, the debt relief will not occur pursuant to title 11 and the reduction of tax attributes will not enable the government to "recapture" the debt cancellation in future years via reduced basis.
A "deed in lieu" would leave the cancellation of a recourse loan & its cancellation of indebtedness under title 11 and force a reduction in attributes under IRC 108(b) relating to IRC 108(a)(1)(A)
Generally:
Even under bankruptcy, IRC section 108 requires the reduction of tax attributes. These include:
IRC 108(b)(2)(A) reduction of NOL's
IRC 108(b)(2)(B)-(G) reduction of general business credit, minimum tax credit, capital loss carryovers, basis redution (in other property), passive activity loss and credit carryovers and foreign tax credit carryovers.
Non-judicial foreclosure operates under California Law to "turn a recourse debt into a non-recourse debt, for tax purposes only. There has been a lot of controversy on this matter as evidenced by articles in Volume 20, No.s 1 & 2 of the California Tax lawyer in 2011, as well as an article by Boutris and Epstein "Tax Consequences of Non-Judicial Foreclosure" which appeared in the Contra Costa Lawyer magazine Sept 28, 2010 and in the California Bar's Tax Section, Litigation subsection newsletter attached below.
The "conversion to non-recourse" as it is popularly known, occurs through California Code of Civil Procedure section 580(d)
580d. No judgment shall be rendered for any deficiency upon a note
secured by a deed of trust or mortgage upon real property or an
estate for years therein hereafter executed in any case in which the
real property or estate for years therein has been sold by the
mortgagee or trustee under power of sale contained in the mortgage or
deed of trust.
This section does not apply to any deed of trust, mortgage or
other lien given to secure the payment of bonds or other evidences of
indebtedness authorized or permitted to be issued by the
Commissioner of Corporations, or which is made by a public utility
subject to the Public Utilities Act (Part 1 (commencing with Section
201) of Division 1 of the Public Utilities Code).
However California Code of Civil Procedure section 580.5. (b) With respect to an obligation which is secured by a mortgage
or a deed of trust upon real property or an estate for years therein
and which is also supported by a letter of credit, neither the
presentment, receipt of payment, or enforcement of a draft or demand
for payment under the letter of credit by the beneficiary of the
letter of credit nor the honor or payment of, or the demand for
reimbursement, receipt of reimbursement or enforcement of any
contractual, statutory or other reimbursement obligation relating to,
the letter of credit by the issuer of the letter of credit shall,
whether done before or after the judicial or nonjudicial foreclosure
of the mortgage or deed of trust or conveyance in lieu thereof,
constitute any of the following:
(1) An action within the meaning of subdivision (a) of Section
726.
Thus there is no single action (or action at all) and no cutting off of the debt by "conversion to non-recourse" under 580(d).
Thus it is my understanding that even if in bankruptcy, a deed in lieu of a debt that was a recourse debt will require the filing under IRC section 108 of a statement of reduction of attributes which will cost them in future.
Therefore it would seem that as I read all these articles and reasonings, that because non-judicial forclosure extinguishes the state source of the obligation (making the debt non-recourse from a tax standpoint only) that it eliminates the need for sec 108 attribute reduction.
I also direct you to IRS Pub 4681 where abandonment (foreclosure) is distinguished from deed-in-Lieu.
Hope this helps.
Curt Harrington
http://patentax.com
(I will try to attach the Lit Section email if I can)
@yahoogroups.com">cdcbaa@yahoogroups.com, Holly Roark <hollyroark22@...> wrote:
>
> Client is surrendering a deeded time share. Lender has provided deed
> in lieu documents. Discharge has not yet been entered but we expect
> the debtors will receive a discharge. Is there a tax consequence to
> the debtors signing the postpetition deed in lieu?
>
> --
> Sent from my mobile device
>
> Holly Roark
> holly@...
> www.roarklawoffices.com
> Central District of California
> Consumer Bankruptcy Attorney
> 1875 Century Park East, Suite 600
> Los Angeles, CA 90067
> T (310) 553-2600
> F (310) 553-2601
>
The post was migrated from Yahoo.
Paul:
Can you explain why this isn't treated like a sale? i.e. Price received at sale minus basis equals taxable gain?
Don't think this area is generally understood by Bk lawyers. This can get really complicated. I've had clients with houses, discharge a lot of debt, get mom to cure default on their house, then, after years of payments and appreciation, sell the house.
So when is a transfer a discharge of indebtedness, or can it ever be? When is it a sale?
D
Sent from my iPhone
On Nov 4, 2011, at 10:59 AM, Paul Horn wrote:
> If the mortgage is included in the BK then when taxpayer file Form 1040; just include Form 982 and there is a box to check that says to the effect no debt cancellation issue.
>
> In the alternative....if it is a primary residence....no worries: homeowners has up to 2 million of debt cancellation tax free. If rental property no debt cancellation income if insolvent.
>
> So either way most homeowners are covered.
>
> Thanks
>
> Paul Horn
> Attorney at Law
> Certified Public Accountant
> 850 E. Las Tunas Drive
> San Gabriel, CA 91776
> 800-380-7076
>
> To: cdcbaa@yahoogroups.com
> Sent: Friday, November 4, 2011 10:51 AM
> Subject: [cdcbaa] Re: Postpetition Deed in lieu - tax consequence?
>
>
> Hm. The lender wants the deed in lieu ASAP or they will just
> foreclose. Not sure I understand the waiting for the discharge order
> before transferring title as it relates to the tax issue. Are you
> referring to the fact that it's estate property and can't be
> tranferred until abandoned or the case is closed?
>
> On 11/4/11, Law Offices of Jonathan Leventhal wrote:
> > No because the debt would have been discharged in bankruptcy. Remember to
> > tell your client in writing to wait until the discharge prior to
> > transferring the title.
> >
> > Jonathan Leventhal, esq.
> > Leventhal Law Group, P.C.
> > 818-347-5800
> >
> > On Nov 4, 2011, at 10:34 AM, "Holly Roark"
> > wrote:
> >
> >
> >
> > Client is surrendering a deeded time share. Lender has provided deed
> > in lieu documents. Discharge has not yet been entered but we expect
> > the debtors will receive a discharge. Is there a tax consequence to
> > the debtors signing the postpetition deed in lieu?
> >
> > --
> > Sent from my mobile device
> >
> > Holly Roark
> > holly@roarklawoffices.com
> > www.roarklawoffices.com
> > Central District of California
> > Consumer Bankruptcy Attorney
> > 1875 Century Park East, Suite 600
> > Los Angeles, CA 90067
> > T (310) 553-2600
> > F (310) 553-2601
> >
> >
> >
>
> --
> Sent from my mobile device
>
> Holly Roark
> holly@roarklawoffices.com
> www.roarklawoffices.com
> Central District of California
> Consumer Bankruptcy Attorney
> 1875 Century Park East, Suite 600
> Los Angeles, CA 90067
> T (310) 553-2600
> F (310) 553-2601
>
>
>
Paul:Can you explain why this isn't treated like a sale? i.e. Price received at sale minus basis equals taxable gain?Don't think this area is generally understood by Bk lawyers. This can get really complicated. I've had clients with houses, discharge a lot of debt, get mom to cure default on their house, then, after years of payments and appreciation, sell the house.So when is a transfer a discharge of indebtedness, or can it ever be? When is it a sale?DSent from my iPhoneOn Nov 4, 2011, at 10:59 AM, Paul Horn <attorneypaul2000@yahoo.com> wrote:
The post was migrated from Yahoo.
Holly.
Give this question to a tax lawyer. After discharge Basis reduced. Deed In lieu is a transfer, like a sale, so be careful giving advice when you don't know Maybe Elmer will chime in.
D
Sent from my iPhone
On Nov 4, 2011, at 10:38 AM, Law Offices of Jonathan Leventhal wrote:
> No because the debt would have been discharged in bankruptcy. Remember to tell your client in writing to wait until the discharge prior to transferring the title.
>
> Jonathan Leventhal, esq.
> Leventhal Law Group, P.C.
> 818-347-5800
>
> On Nov 4, 2011, at 10:34 AM, "Holly Roark" wrote:
>
>>
>> Client is surrendering a deeded time share. Lender has provided deed
>> in lieu documents. Discharge has not yet been entered but we expect
>> the debtors will receive a discharge. Is there a tax consequence to
>> the debtors signing the postpetition deed in lieu?
>>
>> --
>> Sent from my mobile device
>>
>> Holly Roark
>> holly@roarklawoffices.com
>> www.roarklawoffices.com
>> Central District of California
>> Consumer Bankruptcy Attorney
>> 1875 Century Park East, Suite 600
>> Los Angeles, CA 90067
>> T (310) 553-2600
>> F (310) 553-2601
>
>
Holly. Give this question to a tax lawyer. After discharge Basis reduced. Deed In lieu is a transfer, like a sale, so be careful giving advice when you don't know Maybe Elmer will chime in. DSent from my iPhoneOn Nov 4, 2011, at 10:38 AM, Law Offices of Jonathan Leventhal <law@3yl.com> wrote:
No because the debt would have been discharged in bankruptcy. Remember to tell your client in writing to wait until the discharge prior to transferring the title.Jonathan Leventhal, esq.Leventhal Law Group, P.C.818-347-5800On Nov 4, 2011, at 10:34 AM, "Holly Roark" <hollyroark22@gmail.com> wrote:
Client is surrendering a deeded time share. Lender has provided deed
in lieu documents. Discharge has not yet been entered but we expect
the debtors will receive a discharge. Is there a tax consequence to
the debtors signing the postpetition deed in lieu?
Sent from my mobile device
Holly Roark
holly@roarklawoffices.com
www.roarklawoffices.com
Central District of California
Consumer Bankruptcy Attorney
1875 Century Park East, Suite 600
Los Angeles, CA 90067
T (310) 553-2600
F (310) 553-2601
The post was migrated from Yahoo.
First I am assuming that the condo loan is recourse. If it is non-recourse, further tax consequences are not immediately obvious to me at this time.
If the loan is recourse, then Yes, there are tax consequences.
Stating it simply: non-judicial foreclosure will cut off the deficiency before it has a chance to be relieved in bankruptcy. Thus, the debt relief will not occur pursuant to title 11 and the reduction of tax attributes will not enable the government to "recapture" the debt cancellation in future years via reduced basis.
A "deed in lieu" would leave the cancellation of a recourse loan & its cancellation of indebtedness under title 11 and force a reduction in attributes under IRC 108(b) relating to IRC 108(a)(1)(A)
Generally:
Even under bankruptcy, IRC section 108 requires the reduction of tax attributes. These include:
IRC 108(b)(2)(A) reduction of NOL's
IRC 108(b)(2)(B)-(G) reduction of general business credit, minimum tax credit, capital loss carryovers, basis redution (in other property), passive activity loss and credit carryovers and foreign tax credit carryovers.
Non-judicial foreclosure operates under California Law to "turn a recourse debt into a non-recourse debt, for tax purposes only. There has been a lot of controversy on this matter as evidenced by articles in Volume 20, No.s 1 & 2 of the California Tax lawyer in 2011, as well as an article by Boutris and Epstein "Tax Consequences of Non-Judicial Foreclosure" which appeared in the Contra Costa Lawyer magazine Sept 28, 2010 and in the California Bar's Tax Section, Litigation subsection newsletter attached below.
The "conversion to non-recourse" as it is popularly known, occurs through California Code of Civil Procedure section 580(d)
580d. No judgment shall be rendered for any deficiency upon a note
secured by a deed of trust or mortgage upon real property or an
estate for years therein hereafter executed in any case in which the
real property or estate for years therein has been sold by the
mortgagee or trustee under power of sale contained in the mortgage or
deed of trust.
This section does not apply to any deed of trust, mortgage or
other lien given to secure the payment of bonds or other evidences of
indebtedness authorized or permitted to be issued by the
Commissioner of Corporations, or which is made by a public utility
subject to the Public Utilities Act (Part 1 (commencing with Section
201) of Division 1 of the Public Utilities Code).
However California Code of Civil Procedure section 580.5. (b) With respect to an obligation which is secured by a mortgage
or a deed of trust upon real property or an estate for years therein
and which is also supported by a letter of credit, neither the
presentment, receipt of payment, or enforcement of a draft or demand
for payment under the letter of credit by the beneficiary of the
letter of credit nor the honor or payment of, or the demand for
reimbursement, receipt of reimbursement or enforcement of any
contractual, statutory or other reimbursement obligation relating to,
the letter of credit by the issuer of the letter of credit shall,
whether done before or after the judicial or nonjudicial foreclosure
of the mortgage or deed of trust or conveyance in lieu thereof,
constitute any of the following:
(1) An action within the meaning of subdivision (a) of Section
726.
Thus there is no single action (or action at all) and no cutting off of the debt by "conversion to non-recourse" under 580(d).
Thus it is my understanding that even if in bankruptcy, a deed in lieu of a debt that was a recourse debt will require the filing under IRC section 108 of a statement of reduction of attributes which will cost them in future.
Therefore it would seem that as I read all these articles and reasonings, that because non-judicial forclosure extinguishes the state source of the obligation (making the debt non-recourse from a tax standpoint only) that it eliminates the need for sec 108 attribute reduction.
I also direct you to IRS Pub 4681 where abandonment (foreclosure) is distinguished from deed-in-Lieu.
Hope this helps.
Curt Harrington
http://patentax.com
(I will try to attach the Lit Section email if I can)
>
> Client is surrendering a deeded time share. Lender has provided deed
> in lieu documents. Discharge has not yet been entered but we expect
> the debtors will receive a discharge. Is there a tax consequence to
> the debtors signing the postpetition deed in lieu?
>
> --
> Sent from my mobile device
>
> Holly Roark
> holly@...
> www.roarklawoffices.com
> Central District of California
> Consumer Bankruptcy Attorney
> 1875 Century Park East, Suite 600
> Los Angeles, CA 90067
> T (310) 553-2600
> F (310) 553-2601
>
The post was migrated from Yahoo.
No problem.....insolvency works for rental property, vacation home, etc. So you have insolvency as a security blanket; but your bk should give the no tax effect as well.
Paul Horn
Attorney at Law
Certified Public Accountant
850 E. Las Tunas Drive
San Gabriel, CA 91776
800-380-7076
________________________________
To: cdcbaa@yahoogroups.com
Sent: Friday, November 4, 2011 12:51 PM
Subject: Re: [cdcbaa] Re: Postpetition Deed in lieu - tax consequence?
Paul, it is a deeded time share in Hawaii, not a primary residence. Any problems?
Holly
On Fri, Nov 4, 2011 at 10:59 AM, Paul Horn wrote:
>
>If the mortgage is included in the BK then when taxpayer file Form 1040; just include Form 982 and there is a box to check that says to the effect no debt cancellation issue.
>
>
>
>In the alternative....if it is a primary residence....no worries: homeowners has up to 2 million of debt cancellation tax free. If rental property no debt cancellation income if insolvent.
>
>
>
>So either way most homeowners are covered.
>
>
>Thanks
>
>
>Paul Horn
>Attorney at Law
>Certified Public Accountant
>850 E. Las Tunas Drive
>San Gabriel, CA 91776
>800-380-7076
>
>
>
>________________________________
>To: cdcbaa@yahoogroups.com
>Sent: Friday, November 4, 2011 10:51 AM
>Subject: [cdcbaa] Re: Postpetition Deed in lieu - tax consequence?
>
>
>
>
>Hm. The lender wants the deed in lieu ASAP or they will just
>foreclose. Not sure I understand the waiting for the discharge order
>before transferring title as it relates to the tax issue. Are you
>referring to the fact that it's estate property and can't be
>tranferred until abandoned or the case is closed?
>
>On 11/4/11, Law Offices of Jonathan Leventhal wrote:
>> No because the debt would have been discharged in bankruptcy. Remember to
>> tell your client in writing to wait until the discharge prior to
>> transferring the title.
>>
>> Jonathan Leventhal, esq.
>> Leventhal Law Group, P.C.
>> 818-347-5800
>>
>> On Nov 4, 2011, at 10:34 AM, "Holly Roark"
>> wrote:
>>
>>
>>
>> Client is surrendering a deeded time share. Lender has provided deed
>> in lieu documents. Discharge has not yet been entered but we expect
>> the debtors will receive a discharge. Is there a tax consequence to
>> the debtors signing the postpetition deed in lieu?
>>
>> --
>> Sent from my mobile device
>>
>> Holly Roark
>> holly@roarklawoffices.com
>> www.roarklawoffices.com
>> Central District of California
>> Consumer Bankruptcy Attorney
>> 1875 Century Park East, Suite 600
>> Los Angeles, CA 90067
>> T (310) 553-2600
>> F (310) 553-2601
>>
>>
>>
>
>--
>Sent from my mobile device
>
>Holly Roark
>holly@roarklawoffices.com
>www.roarklawoffices.com
>Central District of California
>Consumer Bankruptcy Attorney
>1875 Century Park East, Suite 600
>Los Angeles, CA 90067
>T (310) 553-2600
>F (310) 553-2601
>
>
>
Holly Roark
holly@roarklawoffices.com
www.roarklawoffices.com
Central District of California
Consumer Bankruptcy Attorney
1875 Century Park East, Suite 600
Los Angeles, CA 90067
T (310) 553-2600
F (310) 553-2601
The post was migrated from Yahoo.
Paul, it is a deeded time share in Hawaii, not a primary residence. Any
problems?
Holly
On Fri, Nov 4, 2011 at 10:59 AM, Paul Horn wrote:
> **
>
>
> If the mortgage is included in the BK then when taxpayer file Form 1040;
> just include Form 982 and there is a box to check that says to the effect
> no debt cancellation issue.
>
> In the alternative....if it is a primary residence....no worries:
> homeowners has up to 2 million of debt cancellation tax free. If rental
> property no debt cancellation income if insolvent.
>
> So either way most homeowners are covered.
>
> Thanks
>
> Paul Horn
> Attorney at Law
> Certified Public Accountant
> 850 E. Las Tunas Drive
> San Gabriel, CA 91776
> 800-380-7076
>
> ------------------------------
> *From:* Holly Roark
> *To:* cdcbaa@yahoogroups.com
> *Sent:* Friday, November 4, 2011 10:51 AM
> *Subject:* [cdcbaa] Re: Postpetition Deed in lieu - tax consequence?
>
>
> Hm. The lender wants the deed in lieu ASAP or they will just
> foreclose. Not sure I understand the waiting for the discharge order
> before transferring title as it relates to the tax issue. Are you
> referring to the fact that it's estate property and can't be
> tranferred until abandoned or the case is closed?
>
> On 11/4/11, Law Offices of Jonathan Leventhal wrote:
> > No because the debt would have been discharged in bankruptcy. Remember to
> > tell your client in writing to wait until the discharge prior to
> > transferring the title.
> >
> > Jonathan Leventhal, esq.
> > Leventhal Law Group, P.C.
> > 818-347-5800
> >
> > On Nov 4, 2011, at 10:34 AM, "Holly Roark"
> > wrote:
> >
> >
> >
> > Client is surrendering a deeded time share. Lender has provided deed
> > in lieu documents. Discharge has not yet been entered but we expect
> > the debtors will receive a discharge. Is there a tax consequence to
> > the debtors signing the postpetition deed in lieu?
> >
> > --
> > Sent from my mobile device
> >
> > Holly Roark
> > holly@roarklawoffices.com
> > www.roarklawoffices.com
> > Central District of California
> > Consumer Bankruptcy Attorney
> > 1875 Century Park East, Suite 600
> > Los Angeles, CA 90067
> > T (310) 553-2600
> > F (310) 553-2601
> >
> >
> >
>
> --
> Sent from my mobile device
>
> Holly Roark
> holly@roarklawoffices.com
> www.roarklawoffices.com
> Central District of California
> Consumer Bankruptcy Attorney
> 1875 Century Park East, Suite 600
> Los Angeles, CA 90067
> T (310) 553-2600
> F (310) 553-2601
>
>
>
>
Holly Roark
holly@roarklawoffices.com
www.roarklawoffices.com
Central District of California
Consumer Bankruptcy Attorney
1875 Century Park East, Suite 600
Los Angeles, CA 90067
T (310) 553-2600
F (310) 553-2601
Paul, it is a deeded time share in Hawaii, not a primary residence. Any problems?HollyOn Fri, Nov 4, 2011 at 10:59 AM, Paul Horn <attorneypaul2000@yahoo.com> wrote:
The post was migrated from Yahoo.
If the mortgage is included in the BK then when taxpayer file Form 1040; just include Form 982 and there is a box to check that says to the effect no debt cancellation issue.
In the alternative....if it is a primary residence....no worries: homeowners has up to 2 million of debt cancellation tax free. If rental property no debt cancellation income if insolvent.
So either way most homeowners are covered.
Thanks
Paul Horn
Attorney at Law
Certified Public Accountant
850 E. Las Tunas Drive
San Gabriel, CA 91776
800-380-7076
________________________________
To: cdcbaa@yahoogroups.com
Sent: Friday, November 4, 2011 10:51 AM
Subject: [cdcbaa] Re: Postpetition Deed in lieu - tax consequence?
Hm. The lender wants the deed in lieu ASAP or they will just
foreclose. Not sure I understand the waiting for the discharge order
before transferring title as it relates to the tax issue. Are you
referring to the fact that it's estate property and can't be
tranferred until abandoned or the case is closed?
On 11/4/11, Law Offices of Jonathan Leventhal wrote:
> No because the debt would have been discharged in bankruptcy. Remember to
> tell your client in writing to wait until the discharge prior to
> transferring the title.
>
> Jonathan Leventhal, esq.
> Leventhal Law Group, P.C.
> 818-347-5800
>
> On Nov 4, 2011, at 10:34 AM, "Holly Roark"
> wrote:
>
>
>
> Client is surrendering a deeded time share. Lender has provided deed
> in lieu documents. Discharge has not yet been entered but we expect
> the debtors will receive a discharge. Is there a tax consequence to
> the debtors signing the postpetition deed in lieu?
>
> --
> Sent from my mobile device
>
> Holly Roark
> holly@roarklawoffices.com
> www.roarklawoffices.com
> Central District of California
> Consumer Bankruptcy Attorney
> 1875 Century Park East, Suite 600
> Los Angeles, CA 90067
> T (310) 553-2600
> F (310) 553-2601
>
>
>
Sent from my mobile device
Holly Roark
holly@roarklawoffices.com
www.roarklawoffices.com
Central District of California
Consumer Bankruptcy Attorney
1875 Century Park East, Suite 600
Los Angeles, CA 90067
T (310) 553-2600
F (310) 553-2601
The post was migrated from Yahoo.
Hm. The lender wants the deed in lieu ASAP or they will just
foreclose. Not sure I understand the waiting for the discharge order
before transferring title as it relates to the tax issue. Are you
referring to the fact that it's estate property and can't be
tranferred until abandoned or the case is closed?
On 11/4/11, Law Offices of Jonathan Leventhal wrote:
> No because the debt would have been discharged in bankruptcy. Remember to
> tell your client in writing to wait until the discharge prior to
> transferring the title.
>
> Jonathan Leventhal, esq.
> Leventhal Law Group, P.C.
> 818-347-5800
>
> On Nov 4, 2011, at 10:34 AM, "Holly Roark"
> wrote:
>
>
>
> Client is surrendering a deeded time share. Lender has provided deed
> in lieu documents. Discharge has not yet been entered but we expect
> the debtors will receive a discharge. Is there a tax consequence to
> the debtors signing the postpetition deed in lieu?
>
> --
> Sent from my mobile device
>
> Holly Roark
> holly@roarklawoffices.com
> www.roarklawoffices.com
> Central District of California
> Consumer Bankruptcy Attorney
> 1875 Century Park East, Suite 600
> Los Angeles, CA 90067
> T (310) 553-2600
> F (310) 553-2601
>
>
>
Sent from my mobile device
Holly Roark
holly@roarklawoffices.com
www.roarklawoffices.com
Central District of California
Consumer Bankruptcy Attorney
1875 Century Park East, Suite 600
Los Angeles, CA 90067
T (310) 553-2600
F (310) 553-2601
The post was migrated from Yahoo.
Client is surrendering a deeded time share. Lender has provided deed
in lieu documents. Discharge has not yet been entered but we expect
the debtors will receive a discharge. Is there a tax consequence to
the debtors signing the postpetition deed in lieu?
Sent from my mobile device
Holly Roark
holly@roarklawoffices.com
www.roarklawoffices.com
Central District of California
Consumer Bankruptcy Attorney
1875 Century Park East, Suite 600
Los Angeles, CA 90067
T (310) 553-2600
F (310) 553-2601
The post was migrated from Yahoo.