Posted by JT-IN on December 21, 2002 at 07:01:00:
Pat:
In almost every case, the IRS does not exercise their right of redemption, however, they do have this right for a period of 120 days following the sale, or longer if the owners redemption period is greater than 120 days. This would be the case in Mi and Co, whose redemption is 180 to the owner, hence the IRS redemption is extended to that period as well.
In most cases this just expires, unused by the IRS. Exceptions would be properties with an extremem amount of equity remaining after all Senior mtgs are satisfied. My receommendation is that you should proceed ahead as if this does not exist, and at the very worst case, if they do redeem, the IRS does reimburse your acquisition cost, as well as 6% interest on your money. They will not reimburse you for any rehab costs, if you improved the property in that time period.
JT-IN